3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Unable to process payment Please update your payment information to continue to access your Quizlet Plus benefits, including custom creation tools and ad- Dismiss Update Now free studying. Social Science Economics Microeconomics (3rd Edition) Exercise 4 Chapter 3, Page 97 Microeconomics ISBN: 9781464113260 Table of contents Solutions Verified Solution A Solution B Answered 2 years ago Step 1 1 of 26 We are required to study the given cases and solve various problems related to the supply and demand curve . Equilibrium price is where the supply of goods matches demand. Equilibrium quantity is when there is no shortage or surplus of a product in the market . Want some help understanding this problem? https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 1/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 2 2 of 26 Let us draw a supply and demand curve when there is equilibrium in the market. The graph is plotted by taking quantity along the X axis and price along the Y axis. The market is in equilibrium at price P1 and Q1 where the demand is D1 and supply is S1 . Step 3 3 of 26 a. The market for newspapers in your town Case 1: The salaries of journalists go up. As the salaries of journalists go up, and journalists being one of the key factors of production behind the publishing of newspapers, the supplying quantity of newspaper at the given price will reduce to compensate for the hike in salary of journalists. The supply curve shifts to the left from S1 to S2 considering all other factors constant, as shown in the graph below. https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 2/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 4 4 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when supply decreases P2 → Equilibrium price when supply decreases S1 → Supply curve at P1 and Q1 S2 → Supply curve at P2 and Q2 D1 → Demand curve at P1 and Q1 Step 5 5 of 26 From the graph, it can be seen that as the supply curve shifts to the left from S1 to S2 , the price increases from P1 to P2 and quantity decreases from Q1 to Q2 . https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 3/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 6 6 of 26 Case 2: There is a big news event in your town, which is reported in the newspapers. As a big news event is reported in the newspapers in my town, the demand for newspapers will increase. Step 7 7 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when demand increases P2 → Equilibrium price when demand increases D1 → Demand curve at P1 and Q1 D2 → Demand curve at P2 and Q2 https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 4/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 8 8 of 26 As the demand for newspapers increases, the demand curve shifts to the right from D1 to D2 . Producers of newspapers will respond to the increased demand with an increased supply from Q1 to Q2 and the equilibrium price will increase from P1 to P2 . Step 9 9 of 26 b. The market for St. Louis Rams cotton T-shirts. Case 1: The Rams win the Super Bowl. As the Rams win the Super Bowl, demand for Rams cotton T-shirts increases. https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 5/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 10 10 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when demand increases P2 → Equilibrium price when demand increases D1 → Demand curve at P1 and Q1 D2 → Demand curve at P2 and Q2 Step 11 11 of 26 As the demand for Rams cotton T-shirts increases, the demand curve shifts to the right from D1 to D2 . Producers of Rams cotton T-shirts will respond to the increased demand with an increased supply from Q1 to Q2 and the equilibrium price will increase from P1 to P2 . https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 6/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 12 12 of 26 Case 2: The price of cotton increases. As the price of cotton goes up, and cotton being one of the factors of production, the supplying quantity of cotton T-shirts at the given price will reduce to compensate for the hike in the price of cotton. Step 13 13 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when supply decreases P2 → Equilibrium price when supply decreases S1 → Supply curve at P1 and Q1 S2 → Supply curve at P2 and Q2 D1 → Demand curve at P1 and Q1 https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 7/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 14 14 of 26 From the graph it can be seen that as the supply curve shifts to the left from S1 to S2 , the price increases from P1 to P2 and quantity decreases from Q1 to Q2 . Step 15 15 of 26 c. The market for bagels Case 1: People realize how fattening bagels are. As people realize the side effect of bagels, the demand decreases. https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 8/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 16 16 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when demand decreases P2 → Equilibrium price when demand decreases D1 → Demand curve at P1 and Q1 D2 → Demand curve at P2 and Q2 Step 17 17 of 26 As the demand for bagels decreases, the demand curve will shift to the left from D1 to D2 . The equilibrium price of the bagels will fall from P1 to P2 and the equilibrium quantity will fall from Q1 to Q2 . https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 9/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 18 18 of 26 Case 2: People have less time to make themselves a cooked breakfast. As people have less time to make themselves a cooked breakfast, bagels become a perfect substitute for cooked breakfast thereby increasing its demand. Step 19 19 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when demand increases P2 → Equilibrium price when demand increases D1 → Demand curve at P1 and Q1 D2 → Demand curve at P2 and Q2 https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-… 10/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 20 20 of 26 As the demand for bagels increases, the demand curve shifts to the right from D1 to D2 . Producers of bagels will respond to the increased demand with an increased supply from Q1 to Q2 and the equilibrium price will increase from P1 to P2 . Step 21 21 of 26 d. The market for the Krugman and Wells economics textbook Case 1: Your professor makes it required reading for all of his or her students. As my professor makes it required reading for all of his students, the demand for the textbook increases. https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-8… 11/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 22 22 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when demand increases P2 → Equilibrium price when demand increases D1 → Demand curve at P1 and Q1 D2 → Demand curve at P2 and Q2 Step 23 23 of 26 As the demand for the textbook increases, the demand curve shifts to the right from D1 to D2 . Producers of the textbook will respond to the increased demand with an increased supply from Q1 to Q2 and the equilibrium price will increase from P1 to P2 . https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-… 12/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 24 24 of 26 Case 2: Printing costs for textbooks are lowered by the use of synthetic paper. As the printing costs for textbooks are lowered by the use of synthetic paper, the supply increases. Step 25 25 of 26 The supply and demand curve explaining the situation is shown below. The curve is drawn by plotting the price along the Y axis and quantity along the X axis. In the graph: Q1 → Quantity at equilibrium P1 → Price at equilibrium Q2 → Equilibrium quantity when supply increases P2 → Equilibrium price when supply increases S1 → Supply curve at P1 and Q1 S2 → Supply curve at P2 and Q2 D1 → Demand curve at P1 and Q1 https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-… 13/14 3/5/24, 7:59 PM Microeconomics - 9781464113260 - Exercise 4 | Quizlet Step 26 26 of 26 As the supply curve shifts to the right from S1 to S2 , the price decreases from P1 to P2 and quantity increases from Q1 to Q2 . Exercise 3 Rate this solution Exercise 5 Get an in-depth understanding with AI Define a concept Teach me something new Privacy Terms English (USA) https://quizlet.com/explanations/textbook-solutions/microeconomics-3rd-edition-9781464113260/chapter-3-exercises-4-13805479-66b7-405f-b5c8-… 14/14
