Econ 300 HW
Farmers complain that they cannot make a living selling sugar at the current market-clearing price. They successfully lobby the government to initiate price controls on the sale of sugar. The government sets a price floor substantially above the equilibrium price, and no one is allowed to sell sugar for a price less than the price floor. As a result,
there will be a surplus of sugar
what is a durable good, paper towels or tv?
Tv's
for most industries supply is ??? in the short run than in the long run
less elastic
which of the following will cause the demand for kerosene heaters to increase
a decrease in the price of kerosene (compliment)
which one of the following would not occur if the market price was above the market clearing price
consumers would bid the price up
what happens to the market DEMAND curve if consumer income decreases
consumes demand a smaller quantity (shift left)
would you respect the price elasticity of demand to be larger in the short run or in the long run for paper towels why?
in the long run as new subsets enter the market
the price elasticity of demand for tv's should be larger
in the short run because tv's are durable
steel and aluminum are substitutes. if the price of steel increases, other things remain constant, we would except the price of aluminum to ??? and the equilibrium quantity of aluminum to ??
increase, increase
long run elasticity of demand differ from short run because
it takes time for people to change their consumption habits and it may take time for additional substitutes to become available
a shortage will develop because a price is set below market clearing levels firms will supply ?? than consumers wish to purchase
less
even though the annual consumption of copper is about 100 times greater than it was in 1880, the price of copper has remained relatively unchanged. what could cause this
more efficient technology reducing production cost, demand for copper grew dramatically, new deposits that were cheaper to mine were discovered
what would happen if the market SUPPLY if production costs decrease
production would shift to the rightt and producer a larger quantity
suppose that unusually hot weather causes the demand curve for ice cream to shift right. Why will the price of ice cream rise to a new market equilibrium? hot weather will..
shift the demand curve to the right, initially creating a shortage until the price rises to where the quantity supplied and demanded is equal again
regulation below market clearing level
shortage
how will setting the market price below the market clearing level affect a substitute
substitute price will rise because of increased demand
which one of the following would not cause the demand curve for coca cola to shift
the cost of producing coke increases (supply curve)