EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 7, Problem 3Q
To determine
The effect of invisible hand in moving corn prices, when
(a) Flood destroys the large volume of corn crops
(b) The price of corn substitute, say wheat rises.
(c) There is a change in consumers’ tastes from corn dogs to hot dogs.
(d) There is an increase in the number of consumers’ access to the corn market.
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Students have asked these similar questions
Consider the market for corn. Indicate whether each of the following events will cause a rightward shift in the demand curve (select
all that apply).
A A drought hits corn-growing regions, cutting the supply of corn.
B The government announces a new subsidy for biofuels made from corn.
A global recession reduces the incomes of consumers in poor countries, who rely on corn as a staple food (assuming corn
is a normal good).
D A new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre.
E An advertising campaign by the beef producers' association highlights the health benefits of corn-fed beef.
Provide short answer for the following.
1.Is the demand for table salt elastic or inelastic? Why?
2.Is the demand for stereos elastic or inelastic? Why?
3.Why is it that the production possibilities curve is bowed outward?
4.Why has the government placed price floors on some agricultural goods?
5. Income effect of a price change.
Which of the following will definitely result in a
decrease in the equilibrium price of a good?
Select one:
a. A decrease in demand together with an increase
in supply.
b. An increase in both demand and supply.
c. A decrease in supply only.
d. A decrease in both demand and supply.
e. An increase in demand together with a decrease
in supply.
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Similar questions
- There was a disruption in production and shipment of fertilizer when Russia invaded Ukraine in March 2022. How does the event in the market for fertilizer transition into the market for food. Explain and draw the graphs for both the markets.arrow_forwardHow does the price of corn affect the supply of wheat?arrow_forwardThe fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates Select one: A. the law of demand. B. the law of supply. C. the nature of an inferior good. D. technological improvement. O E. a change in supply.arrow_forward
- Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change? Group of answer choices a.The wage paid carpenters who build new houses might have risen. b.A technological advance in framing a new house might have occurred. c.The rent for nearby apartments might have fallen. d.More home buyers might have moved into the area. e.The cost of wood framing used to build houses might have fallen.arrow_forwardWhat causes the market demand for a commodity to increase (i.e., causes the market demand curve to shift up and to the right)?arrow_forwardHow a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service?arrow_forward
- Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The market demand and the individual demands of Tex, Dex, and Rex are shown in the following table. a. Fill in the table for the missing values.b. Which buyer demands the least at a price of $5? The most at a price of $7?c. Which buyer’s quantity demanded increases the most when the price is lowered from $7 to $6?d. Which direction would the market demand curve shift if Tex withdrew from the market? What if Dex doubled his purchases at each possible price?e. Suppose that at a price of $6, the total quantity demanded increases from 19 to 38. Is this a “change in the quantity demanded” or a “change in demand”?arrow_forwardDescribe how each of the following will affect the demand for hybrid cars: A. A rise in income (assuming that hybrid cars are a normal good) B. Consumers prices of hybrid cars to fall in the future. C. The price of gasoline rises. D. Increased number of campaigns in favor of protecting the environment.arrow_forwardSuppose the national institutes of health publishes a study finding that coffee drinking reduces the probability of getting colon cancer 1. How do you image this will affect the market of coffee? 2. Why 3, Which determinant of demand or supply is being affected? 4. How will the change of the equilibrium price and quantity of coffee? Explain your reasoningarrow_forward
- Which of the following statements is false? a. As more buyers enter the market, the market demand curve shifts to the right. b. As income falls, the demand for an inferior good increases. c. One explanation for a movement up along a given supply curve is that more producers enter the market as price increases. d. A higher price of gasoline may reduce the demand for automobiles.arrow_forward2. Imagine a minivan market. For each scenario below, explain what determinants of demand and supply will be affected. Then determine whether demand or supply increases or decreases. Then draw a diagram to show the effect on the minivan price and quantity. a. The community decided to have more children. b. Steel industry workers strike to raise steel prices. c. Engineers make automatic machines to manufacture minivans. d. The price of sports utility vehicles (SUV) increases.arrow_forwardSuppose the equilibrium price and equilibrium quantity of gold both increase. Which of the following would produce such a change? A. The market supply curve for gold could have increased or the market demand curve for gold could have increased. B. The market supply curve for gold could have increased. C. The market supply curve for gold could have increased or the market demand curve for gold could have decreased. D. The market demand curve for gold could have increased. E. The market demand curve for gold could have decreased.arrow_forward
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