Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 8TY
To determine
(a)
To find the
To determine
(b)
To find the new demand curve due to shift bin taste of tourists and new equilibrium
To determine
(c)
To find the new demand curve due to shift in taste of tourists.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Q2) Illustrate the law of Demand by showing the differences between the changes of quantity demanded and the changes of demand? (Give example by using diagram)
The diagram to the right illustrates a hypothetical demand curve representing the
relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit
of time).
The area of the triangle shown on the diagram is $
(Enter your response as an integer.)
C
Price (dollars per unit)
100-
90-
80-
70-
60-
50-
40-
30-
20-
10-
0-
65
31
0
:25
:59
T
10 20 30 40 50 60 70 80
Quantity (1,000s of units per unit of time)
90 100
o
U
Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.
The equilibrium price
The equilibrium quantity
)At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.
) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.
d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?
e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.
Chapter 4 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
Knowledge Booster
Similar questions
- The following table presents the weekly demand and supply in the market for sweatpants in Dallas. Price Quantity Demanded (Dollars per pair of sweatpants) (Pairs of sweatpants) Quantity Supplied (Pairs of sweatpants) 6 1,650 300 12 1,350 600 18 1,200 750 24 900 1,350 30 750 1,800 On the following graph, plot the demand for sweatpants using the blue point (circle symbol). Next, plot the supply of sweatpants using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for sweatpants. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 36 30 PRICE (Dollars per pair of sweatpants) 24 18 2 0 0 300 600 900 1200 1500 1800 QUANTITY (Pairs of sweatpants) Demand --- Supply + Equilibriumarrow_forwardSuppose that the demand and supply of liter of petrol are given in table 1 below: Price (RM) Quantity demanded (liter per day) Quantity supplied (liter per day) 0.80 8 24 0.75 10 22 0.70 12 20 0.65 14 18 0.60 16 16 0.55 18 14 Table 1 What is the equilibrium price and quantity of petrol, use a graph paper to draw a demand curve and supply curve based on the tablearrow_forwardThe following table presents the monthly demand and supply in the market for sweatpants in Miami. Price Quantity Demanded (Dollars per pair of sweatpants) (Pairs of sweatpants) 6 12 18 24 30 PRICE (Dollars per pair of sweatpants) 36 On the following graph, plot the demand for sweatpants using the blue point (circle symbol). Next, plot the supply of sweatpants using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for sweatpants. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. (?) 30 + 18 0 0 300 1,650 1,350 1,200 900 750 600 900 1200 QUANTITY (Pairs of sweatpants) 1500 Quantity Supplied (Pairs of sweatpants) 1800 300 600 750 1,350 1,800 Demand O Supply ++ Equilibriumarrow_forward
- Question #1: On the news there has been outrage over the price of Epipens, a medication needed for allergic reactions to food and bee stings. The price of a two-pack of Epipens has risen from $100 to $600. The number of Epipens purchased fell from 1000 to 400. At the current time, there are no substitutes for this drug Will this increase in price cause a decrease in demand or a decrease in quantity demanded? Illustrate your answer graphically (either by showing a movement along the demand curve or by shifting the demand curve).arrow_forwardConsider a mid-sized southwestern college town where the demand for liquor is described by the equation Qp = 1500 - 75P, where Qp is the the quantity of bottles of liquor per month, and P is the price (in dollars) for one bottle of liquor. The supply of liquor is described by the equation: Qs = 50P - 325 were Qs is the quantity of bottles of liquor per month. Last month, the local government repealed part of its restricting laws on the public consumption and sale of liquor. As a result of this change, the market for liquor is adjusting and the current market price is $13. (Question 8 of 8) Consider that one month after the repeal went into effect (and the market is in equilibrium), some sellers leave the liquor market. At the same time a report by state health officials about the sudden surge in the number of new alcohol poisoning among college students who are first-time drinkers, led university officials to implement harsher punishment for college students found with alcohol or…arrow_forwardThe following table shows the annual demand and supply in the market for ice cream in Houston. Price Quantity Demanded Quantity Supplied (Dollars per gallon of ice cream) (Gallons of ice cream) (Gallons of ice cream) 4 2,000 200 8 1,600 600 12 1,200 800 16 800 1,200 20 400 1,800 On the following graph, plot the demand for ice cream using the blue point (circle symbol). Next, plot the supply of ice cream using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for ice cream.arrow_forward
- Tablets and laptops are substitutes. Due to manufacturer related issues, there is a deep shortage of tablet-specific parts. What would you expect to happen to the market (prices, supply, demand, quantity sold) shortly after the parts shortage in for each of the following products: a. Tablets?b. Laptops? You can answer each point above with a labeled graph or explain in words, taking into account the differences between a change in the demand (curve) and a change in quantity demanded.arrow_forwardSupply and Demand Problem Set[1] Use the following graph to answer questions 1 through 3: Plot the following Price and Quantity combinations: (4, 8), (1, 2), (5, 10) Is your graph more likely to be a demand curve or a supply curve? Why? Using the equation of a line, and P for price and Q for quantity, what is the algebraic formula of this curve? Use the following graph to answer questions 4 and 5: Plot the following Price and Quantity combinations. Note that the points are given in the format (Quantity, Price).(0, 50), (2, 40), (4, 30), (6, 20), (8, 10) Using the equation of a line, what is the algebraic formula of this demand curve? Use the following information to answer questions 6 through 10: Suppose the equation of the line changes to . Compute the quantity demanded at each indicated price. Price: $50, Quantity: Price: $40, Quantity: Price: $30, Quantity: Price: $20, Quantity: Price: $10, Quantity: Use the following graph to answer questions 11…arrow_forwardPrice 12 10 8 6 4 2 Demand 10 20 30 40 50 60 Quantity Demanded (Q) & Quantity Supplied (Q.) Refer to the graph. Using Qd for quantity demanded and Pfor price, which of the following equations correctly states the demand for this product? 0arrow_forward
- 6. The Market for Chicken Meat in Davao City a. Fill in the missing algebraic signs ( + or -) of the demand and supply equations for chicken meat below according to the hypothesized direction of relationships. where: Q= quantity of chicken meat in kilograms, per day Pc = price of chicken meat (in pesos per kilogram) 1= income of average consumer (in pesos per day) P=price of beef (in pesos per kilogram) W=wage rate paid in the poultry business (in pesos per day) P,= price of mixed feeds (in pesos per kilogram) Demand: Q = 20. Supply: Q = - 20 1.5P 4.5Pc _0.8 I _0.5 W _0.6 Ps 3 PF b. Suppose the other variable affecting the demand for and supply of chicken meat have the following values: I = P300/day; Pa = P100/kg; W = P100/day; Pr = P10/kg i. Derive the simple demand and supply equations where Q is a function of P. ii. Solve for the equilibrium price and quantity in the market. iii. Suppose the government imposes a price ceiling of P50/kg: 1. What happens to the market for chicken? 2.…arrow_forward2) Distinguish between "a change in demand" and "a change in quantity demanded." What are the causes of each type of change and how do we illustrate them graphically?arrow_forwardSuppose that the table on the right shows the quantity demanded of UGG boots at five different prices in 2014 and in 2015. Which of the following variables could cause the quantity demanded of UGG boots to change as indicated from 2014 to 2015? (Check all that apply.) A. An increase in the price of UGG boots B. A decrease in the price of a substitute good C. A decrease in the number of buyers D. The expectation that UGG boots will rise in price Price $160 170 180 190 200 Quantity Demanded 2014 5000 4500 4000 3500 3000 Quantity Demanded 2015 4000 3500 3000 2500 2000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc