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c. Shortage; price will certainly rise. D. Shortage; price will fall. E. Nothing due to the fact that the industry is in equilibrium.
2. Which of the following can lead to rise in the supply for good X? a. A decrease in the number of sellers of good X. B. Boost in the price the inputs offered to make good X. C. Rise in consumers" income, assuming great X is a normal. d. An development in technology used in production of an excellent X. e. None of the above
3. Boost in the price of electrical energy will: a. Boost the demand for kerosene heaters. b. Increase the need for light bulbs. C. Boost the demand for stereos. D. Boost the need for TVs.
4. Which of the following events will cause an increase in the market need for Guinness (a brand of beer)? a. A decrease in the price the Guinness. B. An increase in the price the Heineken (another brand that beer). c. Boost in the price that Planters peanuts (a complementary good). D. Rise in income, if Guinness is an inferior good. E. None of the over will cause boost in demand.
a. What is the equilibrium price of warm dogs? What provides you think so? follow to the definition, the equilibrium price is the price in ~ which amount supplied equals quantity demanded. Native the table we can see the at $1.60, Qs = Qd = 2,400. Therefore $1.60 is the equilibrium price.
b. If the organizers the the sporting event decide to collection the price at 1.80, how plenty of hot dogs will be sold? at $1.80, 4,800 warm dogs will be available for sale, however only 1,600 will be demanded. Therefore, only 1,600 warm dogs will be sold.
2. True or False? Explain. In economics, "normal good" is the surname for a good a typical individual have the right to afford.
False. The expression "normal good" method that when a person"s earnings increases, the intake of that an excellent also increases.
3. A. State the law of Demand.
As the price the a an excellent rises, all various other things being equal, the quantity demanded of that good falls.
b. End the last two decades, tuition fees in ~ Purdue University have increased through 50%. At the very same time, the number of students enrolled has increased from 22,000 to over 35,000. Walk this example show that the law of need is false? describe why or why not. Use graphs.
No, this fact does not refute the law of Demand. The law of demand tells united state what will happen to amount demanded if price is the only variable that changes. In the example provided, countless things have probably readjusted over twenty years, average household income and the reputation of the institution being simply two of them. As a result, the demand for the services provided by that university has shifted. View graph.
4. The complete demand because that wheat and also the total supply of wheat every month in the Kansas City grain market are together follows:
Thousands of bushels demanded
Price per bushel, $
Thousands that bushels supplied
Surplus (+) or shortage (--)
a. Sector equilibrium wake up at the suggest where market clears, the is, wherein quantity offered is equal to amount demanded. In other words, equilibrium price is the price at which there exists neither surplus nor shortage. Looking at the entries in the last shaft (in bold), we can see the equilibrium price is $4. Therefore, the equilibrium amount is 75,000 bushels.
b. For her individual work.
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c. At $3.40, there would certainly be a 13,000 bushels shortage that wheat. The price will not remain at that level since it will be in the sellers" best interest come raise their prices. At $4.90, sellers will supply 21,000 bushels an ext than buyers would demand, thus creating a surplus. In order to eliminate the surplus, sellers would have to decrease your price.
d. The statement is false. A surplus way that in ~ a provided price, quantity gave is higher than amount demanded. Do the efforts to eliminate the surplus, sellers will certainly decrease their prices. Therefore, surpluses drive price down, not up. Shortages, on the various other hand, give sellers the chance to progressive prices, therefore "shortages drive prices up".
e. A ceiling in ~ $3.70 developed by the government (which probably tries to avoid the price from being what it perceives as "too high") would not permit the price to move towards the equilibrium. Together a result, a long-term shortage of wheat will certainly emerge. Buyers will need 7000 an ext bushels of wheat than there is available.