ALL ECONOMICS DISCUSSION, PAPERS HELP HERE!!

[Freaked12]

Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?

A a decrease in demand
B a fall in price
C an increase in supply
D a rise in price

I know this is probably stupid, but this just doesn't make sense to me. I thought it would be a rise in price (D), because the supply curve moves to the right, which causes price to fall. BUT THAT'S WRONG (apparently). Why is the answer B? 

It has to be Answer D

[elemis]

Check it out  

@Freaked You are wrong !

[J.Darren]

It has to be Answer D

Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?

Surplus - excess supply

A a decrease in demand would exacberate the surplus, hence A is incorrect.

B a fall in price would increase the demand, which would exacberate the surplus, hence B is incorrect.

C an increase in supply would exacberate the surplus, hence A is incorrect.

D a rise in price would reduce the demand, it is the correct answer.

An increase in price would result in reduction in demand and increase in supply, whereas a decrease in price would result in an increase in demand and decrease in supply.

[rhea]

is electricity an example of fixed cost/variable cost?

[rhea]

Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?

Surplus - excess supply

A a decrease in demand would exacberate the surplus, hence A is incorrect.

B a fall in price would increase the demand, which would exacberate the surplus, hence B is incorrect.

C an increase in supply would exacberate the surplus, hence A is incorrect.

D a rise in price would reduce the demand, it is the correct answer.


An increase in price would result in reduction in demand and increase in supply, whereas a decrease in price would result in an increase in demand and decrease in supply.

um
D- surplus is excess supply which has to be USED UP by increasing the demand for the product.
u said it yourself, increases price, decreases the demand...creating the opposite effect of what is wanted.

[Freaked12]

um
D- surplus is excess supply which has to be USED UP by increasing the demand for the product.
u said it yourself, increases price, decreases the demand...creating the opposite effect of what is wanted.

woah
never thought it this way

Thanks 

[Freaked12]

is electricity an example of fixed cost/variable cost?

variable

[rhea]

variable

you sure?
i study bs too, and in that it says electricity bills are fixed costs...

[elemis]

Thanks Ari for ALL of your help today, +rep

@J. Darren, the answer was supposed to be B...

No problemo. I'm online the whole day; so shoot if you have questions.

[elemis]

lol is there any reason the males earn waaaaaaay more than the females in your example?
i hope it was just an accident and not intentional

The reason is purely economical. Women, on average, earn less than men. I would prefer equal values for all but this makes things more realistic.

[elemis]

Okay, so wait, if we apply what you said to this statement: "Greenhouse gases caused by burning fuel in Europe are leading to global warming." So the effects on non-European countries will be external costs, and NOT social costs, because we're only taking non-European countries into consideration? If we were taking the entire world under consideration, then it would be a social cost?

Partly correct. The effect on Non-Euro countries is EXTERNAL since they were not part of the production process.

External costs are ONE component of SOCIAL COSTS. The other component is the PRIVATE COSTS.

For example, in your example lets say some of the pollution given off blocks the machinery in a power station BURNING the FUEL.

The COST of cleaning the machinery is a PRiVATE COST to the firm that owns the POWER STATION.

[Freaked12]

Okay, so wait, if we apply what you said to this statement: "Greenhouse gases caused by burning fuel in Europe are leading to global warming." So the effects on non-European countries will be external costs, and NOT social costs, because we're only taking non-European countries into consideration? If we were taking the entire world under consideration, then it would be a social cost?

Social cost is nothing except the adding up of Private costs(to the producer in terms of producing the good/service and to the consumer when he buys the product) + External cost(negative externalities)

[Freaked12]

Partly correct. The effect on Non-Euro countries is EXTERNAL since they were not part of the production process.

External costs are ONE component of SOCIAL COSTS. The other component is the PRIVATE COSTS.

For example, in your example lets say some of the pollution given off blocks the machinery in a power station BURNING the FUEL.

The COST of cleaning the machinery is a PRiVATE COST to the firm that owns the POWER STATION.

EXACTLY
SOCIAL COSTS HAS NO MEANING APPARENTLY

[BlackBunny103]

Hey guys, can you please explain to me why the answer to this question is C? I put D.
Thanxx

[Freaked12]

Its because
the equilibrium point is X thats where the original demand AND supply meet.

When the labour costs increased it means the supply decreased so the supply curve will shift to the left.

When demand decreased demand curve will shift to the left as well
so C is the answer

CORRECTION