Chapter 1. Work It Out Chapter2
Step 1
Work it Out
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You must read each slide, and complete any questions on the slide, in sequence.
Question
Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fish. The accompanying table shows the maximum annual out-put combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish.
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| Maximum annual Output options | Quantity of potatoes (pounds) | Quantity of fish (pounds) |
|---|---|---|
| A | 1,00 | 0 |
| B | 800 | 300 |
| C | 600 | 500 |
| D | 400 | 600 |
| E | 200 | 650 |
| F | 0 | 675 |
Table
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Step 2
Question 1.1
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Incorrect.
Question
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0:10
Step 3
Question
Suppose that the U. S. Department of Transportation imposes costly regulations on manufacturers that cause them to reduce supply by one- third at any given price. Calculate the new supply schedule by filling in the blanks in this table (quantities should include one decimal place, i.e. 15.0). Based on your findings, identify the new equilibrium price and the new equilibrium quantity.
| Price of truck | Quantity of trucks demanded (millions) | Quantity of trucks supplied(millions) | Quantity of trucks supplied after regulations (millions) |
|---|---|---|---|
| $20,000 | 20 | 14 | 7dANGMEJsXo= |
| 25,000 | 18 | 15 | bKegslKoKI4= |
| 30,000 | 16 | 16 | 9KDiV20+kT0= |
| 35,000 | 14 | 17 | 9TWoJfKY+mU= |
| 40,000 | 12 | 18 | 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 |
Table
The new equilibrium price is $ETIUHPkHkhWJEZTU (no decimals).
The new equilibrium quantity is NPmzEy+42DjDjPs9qj+szw== (no decimals).
To find the correct answers you will multiply quantity supplied by two-thirds for all the prices listed. So at a price of $20,000 the manufactures will supply a quantity of 14*2/3 or 9.3 million trucks. At a price of $25,000 the manufacturers will supply a quantity of 15*2/3 or 10.0 million trucks, and so on. The new equilibrium price and quantity will be found where quantity demand equals the new quantity supplied. This occurs at a price of $40,000 and a quantity of 12 million trucks. For further review see section “What Happens When the Supply Cure Shifts”
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