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Zina [86]
3 years ago
8

The market price of cheeseburgers in a college town increased recently, and the students in an economics class are debating the

cause of the price increase. Some students suggest that the price increased because several burger joints in the area have recently gone out of business. Other students attribute the increase in the price of cheeseburgers to a recent increase in the price of calzones at local pizza parlors.
Everyone agrees that the increase in the price of calzones was caused by a recent increase in the price of pizza dough, which is not generally used in making cheeseburgers. Assume that burger joints and pizza parlors are entirely separate entities' that is, there aren't places that serve both cheeseburgers and calzones.

1. The first group of students thinks the increase in the price of cheeseburgers is due to the fact that several burger joints in the area have recently gone out of business.

On the following graph, adjust the supply and demand curves to illustrate the first groups explanation for the increase in the price of cheeseburgers.

I don't have the graphs because I don't know how to input it onto the question but I would like to know the change for each graphs supply and demand lines either to the left or right.

2. The second group of students attributes the increase in the price of cheeseburgers to the increase in the price of calzones at local pizza parlors.

On the following graph, adjust the supply and demand curves to illustrate the second group's explanation for the increase in the price of cheeseburgers.

3. Suppose that both of the events you analyzed above are partly responsible for the increase in the price of cheeseburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the increase in the price of cheeseburgers?

A) If the price increase was small, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.

B) If the equilibrium quantity of cheeseburgers increases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.

C) If the equilibrium quantity of cheeseburgers increases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.

D) Whichever change occurred first must have been the primary cause of the change in the price of cheeseburgers.
Business
1 answer:
Artemon [7]3 years ago
3 0

Answer: B) If the equilibrium quantity of cheeseburgers increases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.

Explanation:

1. An increase in the price of cheeseburgers is due to the fact that several burger joints in the area have recently gone out of business. This will shift the supply curve for cheeseburgers to the left, driving up the price of cheeseburgers and reducing the quantity.

2. An increase in the price of Calzones at local pizza parlors lead to an increase in the demand for Cheese burgers as cheese burgers and calzones are substitutes to each other. So, when price of calzones rise, consumers shift demand to cheeseburgers. This will lead to a rightward shift in the demand for cheese burgers as a result the price and quantity of cheese burgers increase.

3. A decrease in supply due to burger joints going out of business shift the supply curve to the left. Increase in the price of calzones increase demand for burgers shifts the demand curve to the right. Both these will increase the price of cheeseburgers but the effect on quantity cannot be determine as depends on the magnitude of the shift in the two curves.

If demand shifts more than supply, equilibrium quantity increases. If supply shifts more than demand, equilibrium quantity decreases.

Thus, B is correct.

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The classical dichotomy is useful for analyzing the economy because in the long run nominal variables are heavily influenced by
Contact [7]

Answer:

The answer is: True

Explanation:

First of all, the classical dichotomy in economics assumes that real variables of the economy such as output of goods and services and real interest rates are not influenced by what happens to their nominal counterparts, such as the monetary value of output and nominal interest rate.  It doesn´t consider inflation or the nominal supply, in other words money supply is neutral in the economy (because its value is adjusted to inflation).

The real problem with this theory, at least in the short run, is that in real life money supply, interest rates and inflation do affect the GDP of a country. When the money supply of an economy is increased then aggregate demand also increases. More money equals more demand. That happens because the prices of goods and services doesn´t adjust as fast as a change in the money supply. Also this theory doesn´t consider the monetary circuit theory about money being "created" by the banking system every time a loan is made.

7 0
3 years ago
At a product's equilibrium price:
just olya [345]

Answer:

The answer is. C) any buyer who is willing and able to pay the price will find a seller for the product.

Explanation:

At a product's equilibrium price, the quantity demanded of the product equals the quantity supplied of the product. So that means that there will always be a supplier willing to sell the product to any consumer who is willing to pay for that product.

7 0
3 years ago
_____ comes into play when a manager makes a decision with a bias weighing short-term costs and benefits more heavily than longe
Stolb23 [73]

Answer:

Discounting the future cash flows

Explanation:

The reason is that the future returns will devalue with money received because of the Inflation. The money received after some years will result in fall in its value. So the amount received after some year of an equal amount to the amount today will not be worth the same. So discounting of future value receipts helps in decision making in todays value.

6 0
4 years ago
The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift
Drupady [299]

Answer:

d.$56,000

Explanation:

For computing the cost of counting, first we have to calculate the total salary amount which is shown below:

Total Salary = Average salary × number of employees

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Now the cost of counting would be equal to

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= $140,000 × 0%

= $56,000

5 0
3 years ago
Wessner Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.20 Direct labor $
monitta

Answer:

d. $13.00

Explanation:

contributon margin = selling price - variable cost

sales price: $25 per unit

<u>list of variable cost:</u>

Direct mateirals              6.20

Direct labor                     2.80

variable overhead           1.45

sales commisions            1.00

adminsitrative variable<u>   0.55  </u>

total variable cost         12.00

$25 selling price per unit - $12 variable cost per unit =

$13 contribution margin per unit

This is the amount each units "contributes" to ay the fixed cost and make a gain during the period.

6 0
3 years ago
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