Question

Ture/False? Explain. Holding other things constant, in a given market if the consumer incomes increase and...

Ture/False? Explain. Holding other things constant, in a given market if the consumer incomes increase and the cost of producer inputs decrease, then the equilibrium price and the equilibrium quantity will both increase

Homework Answers

Answer #1

Answer : The answer is "False".

Remaining other things same as before if consumer income increase then the demand increase. This shift the demand curve to rightward. If production input cost decrease then the production level increase. This shift the supply curve to rightward. As a result, the equilibrium quantity will increase but the equilibrium price may increase, decrease or stay same based on changes in supply and demand. Therefore, the given statement is false.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Keeping all other things constant, a shift in supply curve to the right will lead to...
Keeping all other things constant, a shift in supply curve to the right will lead to a. Decrease the price and quantity b. Price will go up and quantity will go down c. Price will go down and quantity will go up. d. Increase the price and quantity . 2. In a market if a product is sold below its equilibrium price, what could be interpreted. a. None of the above. b. The Price will go down due to this...
Define the cash conversion cycle (CCC) and explain why, holding other things constant, a firm’s profitability...
Define the cash conversion cycle (CCC) and explain why, holding other things constant, a firm’s profitability would increase if it lowered its CCC. Why do you believe CCC is important to a firm’s profitability?
Other things held constant, an increase in the cost of capital will result in a decrease...
Other things held constant, an increase in the cost of capital will result in a decrease in a projects MIRR A. True B.False
1. Suppose the incomes of buyers in a market for a particular normal good decrease. Draw...
1. Suppose the incomes of buyers in a market for a particular normal good decrease. Draw demand and supply curves and show what will happen to the new equilibrium price and quantity. Will they increase or decrease? 2. Suppose there is a reduction in input prices. Draw demand and supply curves and show what will happen to the new equilibrium price and quantity. Will they increase or decrease? 3. Suppose the incomes of buyers in a market for a particular...
Indicate whether the following statement is TRUE or FALSE and explain your answer: An increase in...
Indicate whether the following statement is TRUE or FALSE and explain your answer: An increase in the price of electric cars will lead, other things equal, to a decrease in the equilibrium price of cars using petrol.
2. According to the law of demand, other things being equal, the lower the price of...
2. According to the law of demand, other things being equal, the lower the price of an assigned textbook, the _______________ the quantity demanded of assigned textbooks will be, and the ______________ likely students will seek out an alternative to the assigned textbook. Group of answer choices lower; less lower; more higher; less higher; more 4. Other things being equal, an increase in the number of sellers of a good will __________________ for that good. Group of answer choices increase...
Suppose that desktop computers are normal goods and laptops are their substitutes. Assume that incomes of...
Suppose that desktop computers are normal goods and laptops are their substitutes. Assume that incomes of desktop users fall dramatically while the prices of desktop processors (which are used as inputs in desktop computer production) increase sharply. How would these developments affect the equilibrium quantity and price of desktop computers? The equilibrium quantity would fall, but the equilibrium price would be ambiguous. The equilibrium price would decrease, but the equilibrium quantity would be ambiguous (i.e. we would not be able...
In the following question you are asked to determine, other things equal, the effects of a...
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. An increase in the price of a product that is a complement to X will: Multiple Choice decrease D, decrease P, and decrease Q. increase D,...
1. There is an increase in bond demand. Holding other factors constant the, a. bond prices...
1. There is an increase in bond demand. Holding other factors constant the, a. bond prices will increase b. interest rates will increase c. loanable funds supply decreases d. loanable funds demanded decreases 2. There is a decrease in bond demand. Holding other factors constant, then a. bond prices decrease b. interest rates decrease c. loanable funds supply increases d. loanable funds demanded decreases 3. The country is currently experiencing 7 consecutive months of gradually increasing inflation. Experts predict at...
Consumer surplus for beer will increase if the demand for beer _________ or the price of...
Consumer surplus for beer will increase if the demand for beer _________ or the price of beer ________. a. increases; increases b. increases; decreases c. decreases; decreases d. decreases; increases Which of the following is the result with the greater the minimum price the producer is willing to accept, relative to the price received? a. The greater the producer surplus b. The greater the consumer surplus c. The smaller the consumer surplus d. The smaller the producer surplus Ken buys...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT