Answer to Question #46648 in Macroeconomics for Claudette Moreno

Question

Predict how each of the following events will raise or lower the equilibrium wage and quantity of coal miners in West Virginia. In each case, sketch a demand and supply diagram to illustrate your answer.
a. The price of oil rises.
b. New coal-mining equipment is invented that is
cheap and requires few workers to run.
c. Several major companies that do not mine coal open factories in West Virginia, offering a lot of
well-paid jobs.
d. Government imposes costly new regulations to
make coal-mining a safer job.

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.
a. The number of people at the most common ages for home-buying increases.
b. People gain confidence that the economy is growing and that their jobs are secure.
c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
d. Because of a threat of a war, people become uncertain about their economic future.
e. The overall level of saving in the economy diminishes.
f. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

Answer 1

Predict how each of the following events will raise or lower the equilibrium wage (we) and quantity (Qe) of coal miners in West Virginia.
a. The price of oil rises - demand rises, We increases, Qe increases
b. New coal-mining equipment is invented that is cheap and requires few workers to run - demand decreases, We decreases, Qe decreases
c. Several major companies that do not mine coal open factories in West Virginia, offering a lot of well-paid jobs - supply decreases, We increases, Qe decreases
d. Government imposes costly new regulations to make coal-mining a safer job - supply rises, We decreases, Qe increases
Predict how each of the following economic changes will affect the equilibrium price (Pe) and quantity (Qe) in the financial market for home loans.
a. The number of people at the most common ages for home-buying increases - demand increases, Pe increases, Qe increases.
b. People gain confidence that the economy is growing and that their jobs are secure - demand increases, Pe increases, Qe increases.
c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans - supply decreases, Pe increases, Qe decreases.
d. Because of a threat of a war, people become uncertain about their economic future - demand decreases, Pe decreases, Qe decreases.
e. The overall level of saving in the economy diminishes - demand decreases, Pe decreases, Qe decreases.
f. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans - supply increases, Pe decreases, Qe increases.