Chapter 5, Supply, Demand, and Price: Applications Video Solutions, Macroeconomics

01:56

Problem 1

Explain how lower lending standards and lower interest rates can lead to higher house prices.

Pragya Ahuja

Numerade Educator

01:48

Problem 2

If there were no third parties in medical care, medical care prices would be lower. Do you agree or disagree? Explain your answer.

Xiaomin Bian

Numerade Educator

02:38

Harvard, Yale, and Princeton all charge relatively high tuition. Still, each uses ACT and SAT scores as admission criteria. Are charging a relatively high tuition and using standardized test scores as admission criteria inconsistent? Explain your answer.

Md.Daniyal Arshad

Numerade Educator

01:43

Problem 4

What do the applications about freeway congestion and 10 a.m. classes have in common?

M S

Numerade Educator

08:21

Problem 5

Economics has been called the "dismal science" because it sometimes "tells us" that things are true when we would prefer them to be false. For example, although there are no free lunches, might we prefer that there were? Was there anything in this chapter that you learned was true that you would have preferred to be false? If so, identify it. Then explain why you would have preferred it to be false.

Rashmi Sinha

Numerade Educator

02:49

Problem 6

In the discussion of health care and the right to sue your HMO, we state, "Saying that a seller's minimum price for providing a good or service rises is the same as saying that the seller's supply curve has shifted upward and to the left." Does it follow that, if a seller's minimum price falls, the supply curve shifts downward and to the right? Explain your answer.

Chau Dang

Numerade Educator

01:19

Problem 7

Application 6 explains that even though no one directly and explicitly pays for good weather ("Here is $$\$ 100$$ for the good weather"), you may pay for good weather indirectly, such as through housing prices. Identify three other things (besides good weather) that you believe people pay for indirectly.

David Collins

Numerade Educator

11:57

Problem 8

Suppose there exists a costless way to charge drivers on the freeway. Under this costless system, tolls on the freeway would be adjusted according to traffic conditions. For example, when traffic is usually heavy, as it is from 6: 30 a.m. to 9: 00 a.m. on a weekday, the toll to drive on the freeway would be higher than when traffic is light. In other words, freeway tolls would be used to equate the demand for freeway space with its supply. Would you be in favor of such a system to replace our current (largely zero price) system? Explain your answer.

Mohan Jain

Numerade Educator

00:39

Problem 9

Wilson walks into his economics class 10 minutes late because he couldn't find a place to park. Because of his tardiness, he doesn't hear the professor tell the class that there will be a quiz at the next session. Consequently, Wilson is unprepared for the quiz and ends up failing it. Might Wilson's failing the quiz have anything to do with the price of parking?

I O

Numerade Educator

02:10

Problem 10

University A charges more for a class for which there is high demand than for a class for which there is low demand. University B charges the same for all classes. All other things being equal between the two universities, which university would you prefer to attend? Explain your answer.

Jennifer Stoner

Numerade Educator

01:37

Problem 11

Suppose the equilibrium wage for a college athlete is $$\$ 40,000,$$ but, because of NCAA rules, the university can offer him only $$\$ 22,000$$ (full tuition). How might the university administrators, coaches, or university alumni lure the college athlete to choose their school over others?

Andrew Davis

Numerade Educator

06:06

Problem 12

Consider the theater in which a Broadway play is performed. If tickets for all seats are the same price (say, $$\$70$$), what economic effect might arise?

Sinisa Stura

Numerade Educator

01:00

Problem 13

What is the relationship between the probability of a person being admitted to the college of his choice and the tuition the college charges?

Lucas Finney

Numerade Educator

05:42

Problem 14

Samantha is flying from San Diego, California to Arlington, Texas, on a commercial airliner. She asks for an aisle seat, but only middle seats are left. Why aren't any aisle seats left? (Hint: The airline charges the same price for an aisle seat as a middle seat.)