Question

In: Economics

Carefully explain what is happening in the market. Indicate the impact if any on demand, supply,...

Carefully explain what is happening in the market. Indicate the impact if any on demand, supply, price and quantity:

a) Fears of mercury poisoning lead locals to shun fish caught in nearby rivers

Impact on demand

Impact on supply

Impact on price

Impact on quantity

b) In the market for milk, increases in the price of Christmas trees cause trees to be planted on land previously used by dairy farmers.

Impact on demand

Impact on supply

Impact on price

Impact on quantity

c) In the market for shrimp, the price of chicken falls and consumers buy more chicken and less shrimp.

Impact on demand

Impact on supply

Impact on price

Impact on quantity

d) A decrease in input prices as well as a simultaneous decrease in the price of a good that is a complement in consumption.

Impact on demand

Impact on supply

Impact on price

Impact on quantity

Answers to be used:-

Shift inwards / to left

Shift outwards / to right

Increase towards equilibrium

Increase equilibrium price

Decrease equilibrium quantity

Decrease towards equilibrium

Excess demand

Excess Supply

Change in quantity uncertain

Increase equilibrium quantity

No impact

Change in price uncertain

Solutions

Expert Solution

(a) Fear of poisoning will decrease the demand for fish.

Impact on demand - Shift inwards

Impact on supply - No impact

Impact on price - Decrease in equilibrium price

Impact on quantity - Decrease in equilibrium quantity

(b) More planting on land decreases cow grazing, lowering supply of milk.

Impact on demand - No impact

Impact on supply - Shift inwards

Impact on price - Increase in equilibrium price

Impact on quantity - Decrease in equilibrium quantity

(c) A preference away from shrimp reduces its demand.

Impact on demand - Shift inwards

Impact on supply - No impact

Impact on price - Decrease in equilibrium price

Impact on quantity - Decrease in equilibrium quantity

(d) Decrease in input prices will increase supply. Decrease in price of complement will increase demand at the same time.

Impact on demand - Shift outwards

Impact on supply - Shift outwards

Impact on price - Change in price uncertain (since higher demand increases price but higher supply decreases price)

Impact on quantity - Increase in equilibrium quantity

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

a) Using diagrams and supply and demand concept, carefully explain the impact of each of the...
a) Using diagrams and supply and demand concept, carefully explain the impact of each of the following on equilibrium price and quantity of certain products. i) Simultaneous decrease in price of raw material and decrease in income for a normal good (other things being equal). ii) Simultaneous increase in business taxes and an increase in consumer income for a normal good (other things being equal).
What are the determinants of supply and demand in a market? Explain how these changes impact...
What are the determinants of supply and demand in a market? Explain how these changes impact on supply and demand and use examples to support your answer. (this question is worth 25 marks)
Using the supply and demand analysis of the market for reserves, indicate what happens to the...
Using the supply and demand analysis of the market for reserves, indicate what happens to the federal funds rate (the cash rate in Australia), borrowed reserves, and nonborrowed reserves in the following situations holding everything else constant. (a) The Fed (central bank) raises the target federal funds rate. (b) The Fed (central bank) raises the interest rate on reserves above the current equilibrium federal funds rate (the cash rate).
Indicate the movement of the supply and/or demand curves, and the impact on equilibrium price and...
Indicate the movement of the supply and/or demand curves, and the impact on equilibrium price and equilibrium quantity. The Russian government has restricted sugar availability to reduce the supply of illegal liquor (sugar is used to increase alcohol content). Russians also like to sweeten their tea with jam, another sugar product.
22. Using the supply and demand analysis of the market for reserves, indicate what happens to...
22. Using the supply and demand analysis of the market for reserves, indicate what happens to the federal funds rate, borrowed reserves, and nonborrowed reserves, holding everything else constant, under the following situations: d) The Fed raises the interest rate on reserves above the current equilibrium federal funds rate. e) The Fed reduces reserve requirements. f) The Fed reduces reserve requirements and then offsets this action by conducting an open market sale of securities.
Explain the main determinants of demand and supply in a market.
Explain the main determinants of demand and supply in a market.
How is the demand and supply in Morocco? how is the market regulated in Morocco? Impact...
How is the demand and supply in Morocco? how is the market regulated in Morocco? Impact of COVID on demand, sypply, price in Morocco?
a. Use the model of demand and supply to explain the impact of a rent ceiling...
a. Use the model of demand and supply to explain the impact of a rent ceiling in the rental housing market in Perth, Western Australia. In your diagram, explain what would happen in the rental housing market if the price of non-rental apartments decreases. [6 marks] b. Show the impact on the tobacco (cigarettes) market if the Russian government imposed a large tax on tobacco. Discuss the incidence of the tax. [5 marks] c. What would happen in the tobacco...
Use demand and supply analysis to carefully explain whether the following statement is true, false, or...
Use demand and supply analysis to carefully explain whether the following statement is true, false, or uncertain: "An increase in immigration harms domestic workers in the long run.” Explain with words only. No graphs or diagrams.
Using supply and demand analysis of the market for reserves, show and explain what happens to...
Using supply and demand analysis of the market for reserves, show and explain what happens to the federal funds rate under the following situations: a. The Fed reduces reserve requirements b. A switch occurs from deposits into currency c. Banks expect a large increase in withdrawals from checking accounts d. The Fed conducts an open market sale of securities
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT