Chageer 0S-Using Supply and Demand CHAPTER FIVE USING SUPPLY AND DEMAND Give the
ID: 1140257 • Letter: C
Question
Chageer 0S-Using Supply and Demand CHAPTER FIVE USING SUPPLY AND DEMAND Give the best answer to each of the following questions 1. Match the graph that best illustrates the event described. S1 Supply S1 S0 s0 D1 D1 DO DO Q1 Go 0001 Quantity (2) Quantity (3) Quantity The price for a gallon of milk is projected to hit $3 in the United States because fewer dairy cows are available from Canada because of mad cow disease and there is greater foreign demand for dairy products. Market: milk. a. b. Hurricanes and heavy rains lead to a huge increase in tomato prices. Market: tomatoes. Low interest rates and a booming economy lead to a boom in housing construction. As a esult, plywood prices rise 24%. Market: plywood. C. 2. For each of the statements below, determine which, if any. govermment interventions it properly describes Your choices are: a price ceiling, a price foor, an excise tax, or a quntity restriction. More than one may apply a. The price that buyers pay will rise. b. The price that buyers pay will fall. The number of units bought and sold will rise. The number of units bought and sold will fall. The market will clear-that is, quantity demanded will be equal to quantity supplied. c. d. e.Explanation / Answer
1. a. The supply curve for milk shifts to the left (decreases) from S0 to S1. The demand for milk also increases. The demand curve shifts to the rightt from D0 to D1. The demand curve shifts to the right because there is an increase in demand. This matches with graph 3
b. The supply of tomatoes falls and the supply curve shifts to the left ( decrease). The shift in supply curve is from S0 to S1. This matches with graph 1.
c. The increase in demand due to the boom in the housing sector. Demand curve shifts from D0 to D1 (increase). This matches with graph 2.