Assume that prices are flexible upward but not downward. Decide the effect on the equilibrium price level and level of output of the following: Firms become less optimistic about future business decisions
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Assume that prices are flexible upward but not downward. Decide the effect on
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Firms become less optimistic about future business decisions
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- Agis Homes is one of the largest builders of new homes in the U.S. As the economist for Agis Homes, you have forecast the following for the year 2022: The price of lumber used to construct homes will increase by 25% The economy will come roaring back and personal income will increase by close to 10% Assume that the prices of new homes are determined by supply and demand. Assuming everything else is held constant: If both of these impacts occur at the same time, what do you expect to happen to the equilibrium price and quantity of new homes? Use demand and supply analysis to help explain your answer.Hand Sanitizer Due to the H1N1 flu outbreak, the demand for hand sanitizer has tripled. Should Johnson & Johnson increase production of their Purell hand sanitizer? Should it invest in doubling production capacity?Pundits often complain about gasoline price increases at the pump during periods of market oil price increases, stating that the gasoline at the gas station was purchased prior to oil market price increases. “Why should gas that is purchased and held in inventory, prior to market price increases, be increased in price? Price gouging!” are typical comments.
- You are supposed to analyze and discuss the effect on the equilibrium output and the price in the Tea market for the October, 2020 after the following changes (Other things held constant). In each case, explain your answer using supply and demand diagram. i) There has been a decrease in people’s income and a rise in the price of sugar (an input for making Tea) during 2020 due to COVID-19 crisis simultaneously. ii) Price of the coffee falls in the month of October 2020Why are prices of agricultural commodities volatile? Discuss, drawing on economic theory and using examples. taking the wheat market as an example. What happens to the income of all wheat growers if the wheat supplied increases, with no other changes? What happens to the income of all wheat growers if the wheat supplied decreases, with no other changes?Suppose wages in the shovel industry increase. Everything else held constant, this will cause the equilibrium price of shovels to and the equilibrium quantity of shovels transacted to Select one: A decrease increase increase; decrease DC decrease, decrease D. increase, increase
- Please explaint correct and incorrect answer Which of the following is NOT held constant while moving along a supply curve? O expected future prices O the price of the good itself the number of sellers O prices of resources used in production Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.In the short run, the quantity of output supplied by firms can deviate from the natural level of output if the actual price level deviates from the expected price level in the economy. A number of theories explain reasons why this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will (decrease/not change/increase) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (raising/lowering) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (fall short of/exceed) the…Refer to Figure 1. Which stage of the cycle is the office rental market in from Point 1 to Point 6? Describe three characteristics of this stage. Limit your answer to 100 words.
- The market for text books is currently in equilibrium. The following are some changes that may take place in the market for textbooks. For each of the following, indicate what will happen to either the demand for or the supply of textbooks by listing which curve is affected and then the terms: "shift right or "shift left" and show it graphically. (NOTE: START FROM THE INITIAL EQUILIBRIUM) otes = NOTES COMMENTS Ps Lrc 65 Chp5. In the short run, the general view of the relationship between housing supply and the price of housing is that the stock of housing is essentially fixed and the supply of housing is very inelastic. This implies that in the short run, the price of housing will be determined by................. while the quantity of housing will be determined by............... (1) demand conditions, supply conditions (2) supply conditions, economic conditions (3) income conditions, demand conditions: (4) market price, supply conditionsWhen asked for investment advise, humorist Will Rogers joked that people should "buy land. They ain't making anymore of the stuff". Explain his advise in terms of supply and demand model. I'm having trouble understanding supply and demand to the point of trying to explain this in my own words. Some advice or simplification of supply and demand would be greatly appreciated.