Question

"1.11 An increase in supply _ a) indicates that more is supplied at higher prices b) indicates that more is supplied at lower prices. c) indicates that more is supplied at all prices_ d) is illustrated by an upward shift of the supply curve 1.12 There is an increase in the number of adverts highlighting the danger of consuming sugar. Which of the following is likely to occur in the market for sugarless sweets, as a result of this? a) An increase in both the equilibrium price and quantity traded: b) A decrease in equilibrium price and an increase in equilibrium quantity traded. c) A decrease in both the equilibrium price and quantity traded. d) An increase in the equilibrium price and a decrease in the equilibrium quantity traded. 1.13 When the price of commodity B rises by 10%, the total revenue received by firms that sell commodity B rises by 5%. The demand for commodity B is therefore. a) perfectly elastic. b) unitary' elastic c) inelastic d) elastic"

          "1.11
An increase in supply _
a) indicates that more is supplied at higher prices
b) indicates that more is supplied at lower prices.
c) indicates that more is supplied at all prices_
d) is illustrated by an upward shift of the supply curve
1.12
There is an increase in the number of adverts highlighting the danger of consuming sugar. Which of the following is likely to occur in the market for sugarless sweets, as a result of this? a) An increase in both the equilibrium price and quantity traded:
b) A decrease in equilibrium price and an increase in equilibrium quantity traded.
c) A decrease in both the equilibrium price and quantity traded.
d) An increase in the equilibrium price and a decrease in the equilibrium quantity traded.
1.13 When the price of commodity B rises by 10%, the total revenue received by firms that sell commodity B rises by 5%. The demand for commodity B is therefore.
a) perfectly elastic.
b) unitary' elastic
c) inelastic
d) elastic"

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Added by Yolanda P.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Andrew Davis

08/06/2022

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11, an increase in supply means that more is supplied at all prices. This is illustrated by an upward shift of the supply curve. Show more…

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"1.11 An increase in supply _ a) indicates that more is supplied at higher prices b) indicates that more is supplied at lower prices. c) indicates that more is supplied at all prices_ d) is illustrated by an upward shift of the supply curve 1.12 There is an increase in the number of adverts highlighting the danger of consuming sugar. Which of the following is likely to occur in the market for sugarless sweets, as a result of this? a) An increase in both the equilibrium price and quantity traded: b) A decrease in equilibrium price and an increase in equilibrium quantity traded. c) A decrease in both the equilibrium price and quantity traded. d) An increase in the equilibrium price and a decrease in the equilibrium quantity traded. 1.13 When the price of commodity B rises by 10%, the total revenue received by firms that sell commodity B rises by 5%. The demand for commodity B is therefore. a) perfectly elastic. b) unitary' elastic c) inelastic d) elastic"

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Transcript

00:01 So here we have a quick series of questions about market, basic market dynamics.

00:06 So for 1 .1, we have a supply increase.

00:10 Remember, this is a supply increase, not an increase in quantity supply.

00:15 So if we draw a market in terms of quantity and price, what's happening here is that the supply curve is increasing, right? the whole supply schedule is shifting up, right? so more is supplied at all prices, right? more supply at all prices.

00:35 That's what we mean by an increase in supply.

00:37 There is a structural change in the market that it says for any price, more is willing to be supplied.

00:43 So in 12, we have sugar is dangerous.

00:49 There is a sort of warning, a fad about the danger of sugar, something that i personally struggle with, he says.

00:56 And we're thinking about what is happening in the marketplace.

01:01 So is this affecting how much people want sugar or is this affecting how much it costs the supply sugar? well, i would say this affects demand and it's going to reduce the demand, right? this doesn't affect the supply at all, right? it costs just as much to grow sugar, but now fewer people want it because there are more aware of how bad it is for you, right? so the demand shifting in for sugar leads to a new equilibrium where the price has declined and the quantity has declined.

01:34 So the price is declined and the quantity has fallen as well, which is c, right? that's the answer there.

01:47 For 1 .1, it was also c...

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