ECN 104 Chapter Notes - Chapter 4: Peanut Butter, Economic Equilibrium, Steak Sauce

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carminehound463

21 Mar 2013

School

Ryerson University

Department

Economics

Course

ECN 104

Professor

Tsogbadral Galaabaatar

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Document Summary

Chapter 4: workers at a bicycle assembly plant currently make minimum wage. If the price of wheat decreases, all else equal, what would we expect? the supply of flour to be unaffected the supply of flour to decrease the supply of flour to increase the demand for flour to decrease. What is the movement from s to s1 called: a decrease in supply, a decrease in quantity supplied, an increase in supply, an increase in quantity supplied, refer to figure 4-1. In this market, what would the equilibrium price and quantity be: and 400, and 600, and 500, and 800, refer to figure 4-2. The equilibrium price of roses is . 00 per dozen. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing area: graph a, graph b, graph c, graph d, refer to figure 4-3.

Related Questions

If suppliers expect the price of their product to fall in the future, then they will:

a. decrease supply now

b. increase supply now.

c. decrease supply in the future but not now.

d. increase supply in the future but not now

periwinkleherring678

1. A farmer can grow wheat or corn. If the price of wheat increases, the farmer expects a better return from growing wheat. All else equal, the corn supply curve

a. shifts to the right.

b. shifts to the left.

c. stays where it is. This is a movement along the corn supply curve.

d. becomes a backward-bending curve.

2 The opportunity cost of a new public highway is the

a. other goods and services that must be sacrificed to construct the new highway.

b. money cost of hiring contractors and construction workers for the new highway.

c. cost of constructing the new highway in a future year.

d. increase traffic from the use of the new highway.

3. All else equal, which of the following will cause the demand curve for a good to shift to the left (decrease)?

a. an increase in the price of the good.

b. an expectation of a future price decline.

c. a decrease in the price of the good.

d. an increase in the supply of a good.

Determine the effect on either the aggregate demand curve (is it a rightward or a leftward shift?), the aggregate short-term supply curve, and the long-term aggregate supply curve (does the upward sloping portions of the SAS curve shift left or right, or does the vertical portion of the LAS curve shift to the right or the left?). Also determine the effect on the price level, the real output level, and employment/unemployment. Explain and express this graphically using the AS/AD macro model.

If workers begin to expect more inflation in the future, then we would expect that the short-run aggregate supply curve will shift up. If workers expect more inflation in the future, they will want their wages to increase more rapidly today. This will increase production costs at each production level, causing firms to increase prices at each production level.

skykoala735

ECN 104 Chapter Notes - Chapter 4: Peanut Butter, Economic Equilibrium, Steak Sauce

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