Chapter 1. eFigure 2.2
eFigure
Isoquants
true
true
You must read each slide, and complete any questions on the slide, in sequence.
Question 1.1
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Correct! Before the salmonella outbreak, at a price of $2 consumers demanded 600 tomatoes. The outbreak will reduce the number of tomatoes demanded, allowing us to eliminate answers (c) and (d). While we know that fewer than 600 tomatoes will be demanded, we also know that fewer than 300 tomatoes will be demanded. This follows from the fact that 300 tomatoes are demanded at a price of $1, so fewer will be demanded at a price of $2.
Incorrect. Before the salmonella outbreak, at a price of $2 consumers demanded 600 tomatoes. The outbreak will reduce the number of tomatoes demanded, allowing us to eliminate answers (c) and (d). While we know that fewer than 600 tomatoes will be demanded, we also know that fewer than 300 tomatoes will be demanded. This follows from the fact that 300 tomatoes are demanded at a price of $1, so fewer will be demanded at a price of $2.
Question 1.2
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Correct! This problem parallels the change in the market due to the salmonella outbreak. In the case of the salmonella outbreak, consumers tastes and preferences were changed. In this case, we find that the price of a complement good has risen. Caprese salad is now more expensive, due to the dramatic increase in the price of mozzarella. Accordingly, consumers eat fewer caprese salads and therefore buy fewer tomatoes. This leads to a decrease in demand for tomatoes. The demand curve shifts in, back, left.
Incorrect. This problem parallels the change in the market due to the salmonella outbreak. In the case of the salmonella outbreak, consumers tastes and preferences were changed. In this case, we find that the price of a complement good has risen. Caprese salad is now more expensive, due to the dramatic increase in the price of mozzarella. Accordingly, consumers eat fewer caprese salads and therefore buy fewer tomatoes. This leads to a decrease in demand for tomatoes. The demand curve shifts in, back, left.
Question 1.3
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Correct! This discovery will change consumers’ tastes and preferences for tomatoes, making tomatoes more desirable and popular. We know that demand will increase and that the demand curve will shift outward, to the right. Without additional information, we do not know exactly how this shift will look. Any of the answers (a), (b) or (c) could be correct. In this case, it is impossible to determine without specific information about the discovery and how consumers react.
Incorrect. This discovery will change consumers’ tastes and preferences for tomatoes, making tomatoes more desirable and popular. We know that demand will increase and that the demand curve will shift outward, to the right. Without additional information, we do not know exactly how this shift will look. Any of the answers (a), (b) or (c) could be correct. In this case, it is impossible to determine without specific information about the discovery and how consumers react.