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- In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.In the short run, the quantity of output supplied by firms can deviate from the natural level of output if the actual price level deviates from the expected price level in the economy. A number of theories explain reasons why this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will (decrease/not change/increase) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (raising/lowering) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (fall short of/exceed) the…Explain what happens to Pe and Qe when supply increases and when supply falls.
- Explain the impact of higher corn prices on consumers. Draw a graph and upload your graph on canvas explaining the impact of higher corn prices on consumers. Explain which curve will shift on your graph and the change in price and quantity demanded. Explain the impact of higher corn prices on producers. Draw a graph and upload your graph on canvas explaining the impact of higher corn prices on producers. Explain which curve will shift on your graph and the change in price and quantity supplied. Edit View Insert Format Tools Table Paragraph |BIU A e p?u|: 12pt vRefer to the figures below and assume that price is fixed at $37,000 and that Buzzer Auto needs 2 workers for every 1 automobile produced. Automobile Market Fixed Prices B' C' $37,000 DM 700 900 1,150 Cars per week Instructions: Enter your answers as a whole number. a. If demand is DM and Buzzer wants to perfectly match its output and sales, how many cars will Buzzer produce? cars How many workers will it hire? workers b. If, instead, demand unexpectedly falls from Dyto DL, how many fewer cars will Buzzer sell? cars How many fewer workers will it need if it decides to match production to these lower sales? workers PriceThe price of oil is currently over $80 per barrel and has been as high as $90 per barrel after Saudi Arabia and a couple of oter OPEC countries reduced output this year. The demand for oil is expected to increase by 1 million barely per day over the next year according to the International Energy Agency but OPEC+ has been unclear about its intentions of increasing oil supplies. a. If OPEC+ increases its production by million barrels per day, we can unambiguously say that the equilibrium price will fall, and the equilibrium quantity will rise.
- Carefully explain what is happening in the following markets. Indicate the impact if any on demand,supply,price and quantity. Choose answer from the following ; no impact, excess supply,shift inwards to left,increase equilibrium price,shift outwards to right, decrease equilibrium quantity,increase towards equilibrium,increase equilibrium quantity, decrease towards equilibrium, change in quantity uncertain, excess demand,decrease equilibrium,change in price uncertain 1d) Electricity is a major input the production of aluminum,and aluminum is substitute in supply for steal ,the effect of an increase in price of electricity.In the market for a nonrenewable natural resource, the equilibrium price is the price that gives suppliers an expected profit equal to the The equilibrium quantity is OA. interest rate; constantly decreasing OB. inflation rate; constantly decreasing C. inflation rate; equal to zero in the long run D. inflation rate; the quantity demanded at that price E. interest rate; the quantity demanded at that price J % 5 6 3 Oll & 7 8 9 0 Next T tact L +Shortages normally accompany an effective price floor. True False
- Refer to the figures below and assume that price is fixed at $37,000 and that Buzzer Auto needs 4 workers for every 1 automobile produced. a. If demand is DM and Buzzer wants to perfectly match its output and sales, how many cars will Buzzer produce? ________cars How many workers will it hire? ________workers b. If, instead, demand unexpectedly falls from DM to DL, how many fewer cars will Buzzer sell? ______cars How many fewer workers will it need if it decides to match production to these lower sales? _________workersPlease explaint correct and incorrect answer Which of the following is NOT held constant while moving along a supply curve? O expected future prices O the price of the good itself the number of sellers O prices of resources used in production Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Price A B D $1 C D1 S2 D2 Quantity per period Refer to the above graph to answer this question. How could you describe the movement from point D to point A? Select one: A. A decrease in supply which leads to a decrease in the equilibrium price a decrease in demand. B. A decrease in demand which leads to an increase in the equilibrium price and a decrease in supply. C. A decrease in demand which leads to an increase in the equilibrium price and a decrease in the quantity supplied. O D. A decrease in supply which leads to an increase in the equilibrium price and a decrease in demand. O E. A decrease in supply which leads to an increase in the equilibrium price and a decrease in quantity demanded.