Business Economics Economics Homework Price And Supply
What effect will each of the following have on the supply of product B?
a. a technological advance in the methods of producing product B.
Increase in supply.
b. a decline in the number of firms that produce product B.
Decrease in supply.
c. an increase in the price of resources used in the production of product B.
Decrease in supply.
d. the expectation that the equilibrium price of B will be lower in the future than it is currently.
Increase in supply.
e. a decline in the price of product A – a good whose production process requires substantially the same techniques, inputs and capital as does the production of product B.
Increase in supply.
f. the levying of specific taxes on product B.
Decrease in supply.
g. the granting of a 50-cent-per-unit subsidy for each unit of product B produced.
Increase in Supply.
h. a new union contract with the laborers that produce B that increases the cost of production by $1.00.
Decrease in supply.
i. an increase in the price of product L – a good consumers use with product B.
Decrease in supply.
j. a decrease in taxes on firms that produce product B.
Increase in supply.
How would each of the following items effect the international price of oil?
a. The United States gives economic assistance to oil-rich Ukraine in the form of oil-drilling technology.
Decrease in price.
b. Iraq, in a war against Saudi Arabia, destroys 50% of the Saudi oil fields.
Increase in price.
c. A U.S. invention uses sea water to fuel automobiles.
Decrease in price.
d. Western European homes begin to use more and more solar power for heat – instead of oil based products.
Decrease in price.
e. The world’s population doubles.
Increase in price.
f. China and India begin to buy more automobiles.
Increase in price.
When the price of hamburger rises – the demand for fish increases. When the price of hamburger rises – the demand for hamburger buns decreases. Why?
Demand for fish rises because hamburgers are becoming to expensive to purchase. Consumers look for substitute goods, they want to purchase a good that would be an inexpensive protein replacement. Since hamburger buns are complementary goods to hamburger, when prices of hamburger increase people tend to purchase less. This leads to less demand for hamburger buns.
If both the demand curve and supply curve for Mazdas shift to the right what happens?
Quantity increases - but it is not clear what happens to price
