More firms produce MP3 players or electronics workers' wages rise? (Draw the diagrams!)
What will be an ideal response?
An increase in the number of firms that produce MP3 players increases the supply of MP3 players. The supply curve of MP3 players shifts rightward. Demand remains unchanged. The price of an MP3 player falls and the quantity of MP3 players increases. You can illustrate this outcome by drawing a diagram like Figure 3.9 on page 70.
A rise in the wages of electronic workers decreases the supply of MP3 players because it increases the cost of producing MP3 players. The supply curve of MP3 players shifts leftward. Demand remains unchanged. The price of an MP3 player rises and the quantity of MP3 players decreases.
/
You might also like to view...
Dumping occurs when a foreign firm ________
A) pollutes international waters B) disposes of waste materials in other countries C) sells inferior output to foreigners D) sells its exports at a lower price than its cost of production
The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects
A) households B) banks C) government D) firms
What is the "most favored nation" principle of the WTO?
a. Trading partners may choose a favorite nation to trade with. b. Any nation can refuse to trade with another that is not its most favored nation. c. The WTO has the right to choose the nation that has performed best within the WTO guidelines as its most favored nation. d. Every nation must grant the same rights and treatment to other nations in the WTO as its "most favored nation."
Markets, viewed from the perspective of the supply and demand model:
A. assume many buyers and many sellers of a standardized product. B. assume market power so that buyers and sellers bargain with one another. C. do not exist in the real-world economy. D. are approximated by markets in which a single seller determines price.