13.The Happy Corn Company produces canned corn grown in its fresh fields. Shown at right is the market in equlibrium.

The government has recently announced a higher subsidy to corn producers.

1.) Using the line drawing tool, show how this change effects either supply and/or demand. Properly label any lines that you draw.

2.) Using the point drawing tool, plot the new market equilibrium. Label this point 'E'.

Carefully follow the instructions above, and only draw the required objects.

In this case, the equilibrium price has

A.remained the same.

B.dropped.

C.increased.

D.doubled.

15.The initial supply curve for Logitech speakers shows that at a price of $30, Logitech is willing to produce 4,750 units. At that same price, consumers demand 8,000 units. There is a

A.surplus, which will increase the price and increase the quantity supplied.

B.surplus, which will increase the price and decrease the quantity supplied.

C.shortage, which will increase the price and increase the quantity supplied.

D.shortage, which will increase the price and decrease the quantity supplied.

16.Suppose that the initial equilibrium price of a pizza is $9 and that the initial quantity exchanged is 30 thousand pizzas per month.

Use the line drawing tool to show the effect of a technological improvement that decreases the cost of producing pizzas. Be sure to properly label your line.

Carefully follow the instructions above, and only draw the required objects.

As a result of the technological improvement, the price of pizzas will be

greater than

less than

equal to

the original price of $9, and the quantity exchanged will be

greater than

less than

equal to

the original equilibrium quantity of 30 thousand pizzas per month.

17.Suppose there is an increase in the wage paid to pizza workers.

Use the line drawing tool to show the effect of this increase in production costs on the market for pizza. Be sure to properly label your line.

Carefully follow the instructions above, and only draw the required objects.

As a result of the change in production costs, the equilibrium price

increased

decreased

, and the equilibrium quantity of pizza

increased

decreased

.

19.Decrease in the Price of Heroin. Between 1990 and 2003, the price of heroin decreased from $235 per gram to $76 per gram. Over the same period, the quantity of heroin consumed increased from 376 metric tons to 482 metric tons.

Use the line drawing tool to show these changes in price and quantity. Specifically, what must have taken place in the heroin market? Properly label this line.

Carefully follow the instructions above, and only draw the required objects.