Chapter 3: Problem 10
In the previous chapter, you learned about the law of increasing opportunity costs. What does this law have to do with an upward-sloping supply curve?
Chapter 3: Problem 10
In the previous chapter, you learned about the law of increasing opportunity costs. What does this law have to do with an upward-sloping supply curve?
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Get started for freeAt equilibrium in a market, the maximum price that buyers would be willing to pay for the good is equal to the minimum price that sellers need to receive before they are willing to sell the good. Do you agree or disagree with this statement? Explain your answer.
Some goods are bought largely because they have "snob appeal." For example, the residents of Beverly Hills gain prestige by buying expensive items. In fact, they won't buy some items unless they are expensive. The law of demand, which holds that people buy more at lower prices than higher prices, obviously doesn't hold for the residents of Beverly Hills. The following rules apply in Beverly Hills: high prices, buy; low prices, don't buy. Discuss.
With respect to each of the following changes, identify whether the demand curve will shift rightward or leftward: a. An increase in income (the good under consideration is a normal good) b. A rise in the price of a substitute good (caused by a decline in supply) c. A rise in expected future price d. A fall in the number of buyers
Many movie theaters charge a lower admission price for the first show on weekday afternoons than they do for a weeknight or weekend show. Explain why.
Describe how each of the following will affect the demand for personal computers: a. A rise in income (assuming that computers are a normal good) b. A lower expected price for computers c. Cheaper software d. Computers that are simpler to operate
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