If demand and supply decrease equally, the equilibrium price will rise, but the equilibrium quantity will fall. B. Suppose that some apartment buildings are turned into condominiums and home/house prices are falling. In the winter, which is the peak season for winter coats, the price of winter coats is typically higher than it is in t... What would be the substitution effect and the income effect of a wage increase? In the graph below, the price of capital is $500 per unit. The demand curve shifts right. Suppose gasoline prices increased sharply and consumers became fearful of owning too many expensive cars. A. she will want to work fewer... Use a demand/supply diagram to discuss why rice farmers may not benefit from an abundant harvest. b) A decrease in leisure time. max U = 2x + 4xy = 2x(1 + 2y) s.t. Supply increases while demand decreases. Firms will enter the industry in the LR and price will fall, b. B. b. hourly wage for producing an additional unit of output at each quantity. Problem Set: Supply and Demand 1. a. Suppose the market is defined by Demand: Q = 155 - 2P Supply: Q = 3 + 3P At a price of P = 19, what is the size of the shortage that will exist in the market? $120 b. b) There is a substantial increase in wages in tobacco growing states. Which one of the following is a determinant of supply? In simple terms, explain the concepts of supply and demand. Identify two reasons why an individual's labor supply curve is usually upward sloping. What happens to the quantity of fish bought and sold when the cold weather sets in? Practice your understanding of supply and demand with the help of our fun quiz. Answer true or false: There will be a surplus of a given product when consumers are willing to buy more than producers offer to sell. b. the price level increases. A.) The market for newspapers in your town- Answer: A graph with price of a newspaper on the vertical axis and quantity of newspapers on the horizontal axis. Explain a situation using the supply and demand for skilled labor in which the increased number of college graduates leads to depressed wages. Suppose that the demand curve for coffee is Q = 10 - p and the supply curve is q = 2p - 2. List three factors that could affect the demand for tablet computers. How can you explain this? Create supply and demand diagrams to show the price and quantity for these: a) A cure is found for lung cancer. a. DAY 3 â¢answer text-dependent questions â¢complete a foldable about the â¦ b. an expectation that the product's price will fall in the future. The supply curve for oil slopes upward because additional quantities of oil can only be produced at a higher cost. $240 c. $200 d. None of the above are correct. Suppose the market for a good is initially in equilibrium, and then a shock occurs which causes the demand to increase (shift to the right). If a maximum interest rate for credit cards is set about the equilibrium interest rate, _____. Wooden fence posts come from harder woods since they must be more durable. Explain what happens to Pe and Qe when demand (supply) increases and when demand (supply) falls. If the supply of a product is free but limited in quantity such that only half of the market will be able to obtain the product, what does the supply/demand graph look like? The supply of personal computers is likely to increase this year. What could be responsible for th... How would a decrease in roofing supply prices influence the home construction market? Other things being equal, the effect of a decrease in the price of X would cause which of the following? Identify a competitive equilibrium of demand and supply. B. b. Market: cigars. C. decrease in supply. The first step in HRP is: A) conducting a skills inventory. Assume there is a simultaneous decrease in the cost of batteries used in hybrid cars and a shift in consumer preferences toward more fuel-efficient vehicles. Earlier this year, it was reported that the supply of avocados has fallen because of weather conditions. The table below shows different quantities of labor supplied and labor demanded at different wage rates. a. Elasticity b. (a) true (b) false. In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. D) a point of intersection.