/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q.22 When analyzing a market, how do ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 3: Q.22 (page 78)

When analyzing a market, how do economists deal

with the problem that many factors that affect the market

are changing at the same time?

Short Answer

Expert verified

Economist consider only one or two factors at a time.

Step by step solution

01

Step 1.

Economists deal with the problem that many factors that affect the market are changing at the same time by taking only one factor, the rest factors remain constant.

Taking only one factor does not apply to real-life scenarios but it helps for a better understanding of the problem & simplifies the Economic model.

02

Step 2.For example:

In comparative advantage theory,

the assumptions are-

  • There are only two countries.
  • only factor of production is labor.
  • In reality, these assumptions are unrealistic because one country does trade with many countries with varieties of goods but theory introduces us to opportunity cost which helps in choosing between different options for production.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these changes will affect supply or demand, and in what direction.

a. There have recently been some important cost-saving inventions in the technology for making paint.

b. Paint is lasting longer, so that property owners need not repaint as often.

c. Because of severe hailstorms, many people need to repaint now.

d. The hailstorms damaged several factories that make paint, forcing them to close down for several months.

Will supply curves have the same shape in all

markets? If not, how will they differ?

If the price is above the equilibrium level, would

you predict a surplus or a shortage? If the price is below

the equilibrium level, would you predict a surplus or a

shortage? Why?

A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will be the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at \(2.40? At \)2.00? At \(3.60?

PriceQdQs
\)1.609,0005,000
\(2.008,5005,500
\)2.408,0006,400
\(2.807,5007,500
\)3.207,0009,000
\(3.606,50011,000
\)4.006,00015,000

Review Figure 3.4. Suppose the government

decided that, since gasoline is a necessity, its price

should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the gasoline market?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.