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All else constant, an increase in the incomes of consumers in the market for diamonds woul

All else constant, an increase in the incomes of consumers in the market for diamonds would cause the supply of diamonds to increase.

77) Assume that in an effort to help consumers, the government decides to reduce the amount of taxes it imposes on sellers of gasoline, that is, sellers are required to pay the government a smaller fee for each gallon of gas they sell. In the market for gas, this would have the effect of causing an increase in the supply of gas and a decrease in equilibrium price.

78) Rent controls have the effect of keeping prices under control and maintaining an adequate supply of affordable housing for lower income people.

79) Federal subsidies to farmers can have the effect of creating a surplus in the market for certain crops.

80) Consider the market for air travel. A simultaneous increase in the price of fuel and another terrorist attack on United States soil would cause the equilibrium quantity of air travel to go down, but have an uncertain effect on equilibrium price.

81) A simultaneous improvement in the technology used to produce computers and increase in the number of buyers in the computer market would cause the equilibrium price of computers to drop but have an uncertain effect on equilibrium quantity.

82) Assume a national brewing company loses market share to a lower-priced competitor. Assume also that the company's workers go on strike and are able to negotiate a hefty wage increase. As such, we can conclude, with certainty, that the combination of these two changes would cause the equilibrium price and quantity of the company's product to decrease.

83) Because unemployment is a macroeconomic topic, an increase in unemployment would not be expected to have any impact on the equilibrium price or quantity in the market for an individual good.

84) An increase in the availability of health insurance could be expected to cause the average price of health care to increase.

85) Assume the demand and supply functions for good X can be written as

Qd = 1000 - 40Px

Qs = -200 + 20Px

In this example, equilibrium price is $20 and the equilibrium quantity is 200

Dec 07 2019 View more View Less

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