Show in diagram the effect on the diagram curve, the supply curve, the equilibri
ID: 1252319 • Letter: S
Question
Show in diagram the effect on the diagram curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events. For each case, draw the diagram and Provide a through Explanation.a) The market for newspaper in your town
Case 1: the salaries of journalists go up
Case 2: there is a big news event in your town, which is reported in the newspapers
d) the market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
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Explanation / Answer
Show in diagram the effect on the diagram curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events. For each case, draw the diagram and Provide a through Explanation. Each question is answered; all diagrams are provided bellow. letters are marked above each graph. Label the Y axis "price" and the X axis "quantity."
a) The market for newspaper in your town
Case 1: the salaries of journalists go up
Journalists = labor; labor = a part of supply (or production). Thus higher wages mean higher production costs, shifting the supply curve to the left. Diagram B (see below; the letters are marked above each graph)
Case 2: there is a big news event in your town, which is reported in the newspapers
Demand is greater (because more people want to read about this breaking news), so the demand curve shifts to the right, indicating higher quantities demanded. Diagram A (see below; the letters are marked above each graph)
d) the market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students
Demand increases, shifting the demand curve to the right. Diagram A (see below; the letters are marked above each graph)
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper
Production costs decrease, shifting the supply curve to the right. Diagram C (see below; the letters are marked above each graph)