This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs ... (Read 69 times)

cmoore54

  • Hero Member
  • *****
  • Posts: 568
on: Jun 29, 2018
Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase. What will happen in the market for CDs?
 
  What will be an ideal response?

Question 2

When deriving the production possibilities curve, it is assumed that
 
  A) the amount of each good that is to be produced is fixed.
  B) the prices of resources are fixed along the curve.
  C) most resources can be used to produce only one good.
  D) resources are efficiently used.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

frogdreck123456

  • Sr. Member
  • ****
  • Posts: 329
Reply #1 on: Jun 29, 2018
Answer to Question 1

Since stereo equipment is a complementary good to CDs, a decrease in the price of stereo equipment causes the demand for CDs to increase. The increase in labor costs causes the supply of CDs to decrease. The price of CDs will increase, but the quantity sold in the market could increase, decrease, or remain the same. The quantity effect depends on how much demand increased relative to how much supply decreased.

Answer to Question 2

D


cmoore54

  • Member
  • Posts: 568
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

apple

  • Member
  • Posts: 352
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Critical care patients are twice as likely to receive the wrong medication. Of these errors, 20% are life-threatening, and 42% require additional life-sustaining treatments.

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

There are more bacteria in your mouth than there are people in the world.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Alan Price - Poor People Alan Price - Poor People
Demonstrating the use of venipuncture equipment. Using a syringe to draw blood. Demonstrating the use of venipuncture equipment. Using a syringe to draw blood.
The paper test involves holding a piece of paper near the tailpipe of an idling engine. A good ... The paper test involves holding a piece of paper near the tailpipe of an idling engine. A good ...
Normal action of antidiuretic hormone. Normal action of antidiuretic hormone.
Red blood cells with normal hemoglobin, like the three similar ones, are smooth and round Red blood cells with normal hemoglobin, like the three similar ones, are smooth and round
Video: Global warming and its effect on climate change

For a complete list of videos, visit our video library