Assume that the prices of resources used to produce automobiles increases. What does the supply and...

Assume that the prices of resources used to produce automobiles increases. What does the supply and demand model predict will happen as a result in the market for automobiles?

Question 4 options:

A)	Equilibrium price and quantity decrease.

B)	Equilibrium price increases, and equilibrium quantity decreases.

C)	Equilibrium price and quantity increase.

D)	Equilibrium price decreases, and equilibrium quantity increases.

Expert Solution

Answer (B) - Equilibrium price increases and equilibrium quantity decreases.

Due to increase in the price of the resources used to produce automobiles, the supply curve shift to the left resulting in more price for the same quantity of goods or less quantity of goods at same price. Refer to the figure below for more details. As aggregate demand is fixed, the result is decrease in the equilibrium quantity and increase in the equilibrium prices

Rahul Sunny answered 2 years ago

An inelastic supply increases. Compare the size of the changes in prices and quantities with the...

An inelastic supply increases. Compare the size of the changes in prices and quantities with the size of those changes that would occur the same increase in an elastic supply. The effects of an increase in an inelastic supply will be: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a a larger change in equilibrium quantity and a larger change in equilibrium price. b a larger change in equilibrium quantity and...

To what extent should society's resources be used to produce new weapons for war?

Resources must be used in the production process to produce goods and services. Resources are also...

Resources must be used in the production process to produce goods and services. Resources are also called factors of production. Resources are traded in the market where the equilibrium quantity and price of the resources are determined. Most markets are competitive, that is, there are many buyers and sellers. Resource demand or factor demand is a derived demand. Where is this demand derived from? Give an example to illustrate this relationship.

Suppose that the money supply increases in the short run, this will increase prices according to...

Suppose that the money supply increases in the short run, this will increase prices according to __________. Group of answer choices both the short run Phillips curve and the aggregate demand and aggregate supply model neither the short run Phillips curve not the aggregate demand and aggregate supply model the short run Phillips curve but not the aggregate demand and aggregate the aggregate demand and aggregate supply model but not the short Run Phillips curve

what causes the decrease in import prices? does supply and demand play a role?

QUESTION 6 Assume Qd=10-2P and Qs=P. What is the elasticity of SUPPLY if price increases from...

QUESTION 6 Assume Qd=10-2P and Qs=P. What is the elasticity of SUPPLY if price increases from $1 to $3? a.Inelastic b.Not enough information is available to answer this question. c.Elastic d.Unit elastic 10 points QUESTION 7 Assume Qd=10-2P and Qs=P. If a tax of $1 is imposed by the government, who will pay the larger burden of the tax. a.Buyers b.Buyers and sellers will pay equal shares of the tax. c.Not enough information is in the question to say...

What does it mean by Marginal cost reflects the cost to society of the resources needed to produce an additional unit of output?

The first thing to notice about monopoly is that price exceeds the marginal cost of production: PM > MC. The price in a market reflects the value to society of another unit of output. Marginal cost reflects the cost to society of the resources needed to produce an additional unit of output. Since price exceeds marginal cost, the monopolist produces less output than is socially desirable. In effect, society would be willing to pay more for one more unit of...

Assume that at time 5 no system resources are being used except for the processor and...

Assume that at time 5 no system resources are being used except for the processor and memory. Now consider the following events: At time 5: P1 executes a command to read from disk unit 1. At time 15: P2's time slice expires. At time 18: P4 executes a command to write to disk unit 1 At time 20: P3 executes a command to read from disk unit 2. At time 24: P2 executes a command to write to disk unit...

Assume that at time 3 no system resources are being used except for the processor and...

Assume that at time 3 no system resources are being used except for the processor and memory. Now consider the following events: At time 2: P0 is ready. At time 4: P0 is selected by CPU scheduler At time 8: P0 executes a command to read from disk 0. At time 16: An interrupt occurs from disk unit 0: P0's read is complete. For each time 2, 4, 8 and 16, identify which state process is in. If a process...

a) Produce a histogram of the distribution of these prices. Comment on what this histogram reveals...

a) Produce a histogram of the distribution of these prices. Comment on what this histogram reveals about the distribution. [Be sure to relate your comments to the context, and refer to the shape, center, variability, and outliers (if any).] price 413 413 455 455 459 465 495 495 499 499 500 500 504 510 515 520 529 529 529 530 535 570 570 579 585 589 599 600 650 660 665 665 695 698 699 699 699 700 795 799...

Question