Question: Suppose that oil prices sharply increase, while more cities pass laws banning the use of plastic bags at stores. Use a demand and supply graph

Suppose that oil prices sharply increase, while more cities pass laws banning the use of plastic bags at stores. Use a demand and supply graph to illustrate your answers to the following questions.
a. Can we use this information to be certain whether the equilibrium price of recycled plastic will increase or decrease?
b. Can we use this information to be certain whether the equilibrium quantity of recycled plastic will increase or decrease?

Step by Step Solution

★★★★★

3.41 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The following graph shows the initial equilibrium price P 1 and equilibrium quantity Q 1 in the ma... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1347-B-A-A-M-E(120).docx

120 KBs Word File

Students Have Also Explored These Related Micro Economics Questions!

Suppose that a frost in Florida reduces the size of the orange crop, which causes the supply curve for oranges to shift to the left. Briefly explain whether consumer surplus will increase or decrease...

If, over time, the demand curve for a product shifts to the right more than the supply curve does, what will happen to the equilibrium price? What will happen to the equilibrium price if the supply...

Suppose the demand curve for a product is given by Q 300 2P 4I, where I is average income measured in thousands of dollars. The supply curve is Q 3P 50. a. If I 25, find the market-clearing...

1.Suppose that the trade off between unemployment and inflations is determined by the Philips curve: 1 =u" -a(x-*') Where u denotes the unemployment rate a" un the natural rate, # the rate of...

4 Files 12:47 PM Mon May 16 Insert Draw Layout Review View Unit 3Microec0nomics Name: ELASTICITY Use the space below to take notes during class. Elastic: Unit Elastic: Inelastic: Perfect...

Files 12:56 PM Mon May 16 25% Unit+2+workbook Q . . . Home Insert Draw Layout Review View Calibri Bold (Body) 36 B I U aAv A v Unit 2-Supply and Demand Name: HR: LAW OF SUPPLY Use the space below to...

The insert on pg 108 and 109 provides an outline of the different areas where hard and soft laws are in place. Briefly outline the various acts, laws, etc. for each. Do not have to go into detail...

.this need to answer from that file article. Draw a supply and demand graph to illustrate the changes described. Be sure to label your graph and clearly indicate which curve(s) shifts and what...

Frito-Lay, the multi-billion-dollar snack food giant, requires vast amounts of water, electricity, natural gas, and fuel to produce its 41 well-known brands. In keeping with growing environmental...

How much is the net income(loss) for the year? BROWN Company keeps limited records. Its assets and liabilities at the beginning and end of the current year are as follows: Cash in bank Accounts...

) The equilibrium expected return of XYZ a ) is equal to that of the market b ) is greater than that of the market c ) is 0 . 7 times that of the market d ) cannot be determined on the basis of the...

In calculating the incremental costs of a particular project, how would you treat the possible future cost of a lawsuit that may occur as a result of this project, where the cost of such a lawsuit...

Look again at the section "The Department of Justice and FTC Merger Guidelines," which begins on page 518. Evaluate the following situations. a. A market initially has 20 firms, each with a 5 percent...

Use the graphs above to answer the questions. a. If this firm wants to maximize profits, what price will it charge in Market 1, and what quantity will it sell? b. If this firm wants to maximize...

What is perfect price discrimination? Is it likely to ever occur? Is perfect price discrimination economically efficient? Briefly explain.

Last year Carson Industries issued a 1 0 - year, 1 4 % semiannual coupon bond at its par value of $ 1 , 0 0 0 . Currently, the bond can be called in 6 years at a price of $ 1 , 0 7 0 and it sells for...

You are making forecasts for two securities that promise perpetual, growing annual cash flows. For both securities , calculate the cash flow you can expect at the end of year 7 ( that is , seven...

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 - $50 - $100 Year 1 $27 $19 Year 2 $21 Year 3 $22 $49 Year 4 $15...