Question 52.5 pts Suppose the incomes of buyers in a market for a particular nor

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Question 52.5 pts

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

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Question 62.5 pts

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Question 72.5 pts

Figure 6-3

Panel (a)

Panel (b)

Refer to Figure 6-3. In panel (b), there will be

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Question 82.5 pts

Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. PrICe 50 45 40 35 25 15 10 100 200 300 400 500 600 700 800 900 4anztj

Explanation / Answer

52) The asnwer is A -) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.

because, the decrease in the income of the buyers decreases, which decrease the demand for the good at each price level, therefore the equilbruim price would decrease and along with the input price also decrease which cause to supply to increase which decrease the equilbruim price but due to decrease in income , the equilbruim quantity changes is ambigious.

62) The asnwer is D -) All of the above are correct.

because, at price $15, the quantity demand is more than quantity supplied so, the demand is exceed and there is shortage as well.

72) The asnwer is C -) a surplus of wheat.

because at the price floor which is higher than equilbruim price, more good supply than demand therefore there is a surplus of wheat in the market.

82) The asnwer is A -) $24.

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