Saturday, March 10, 2012

What is the effect of a wage increase and improved technology on equilibrium price and quantity?

First year Uni Economics question. It would be great if you explained every bit in detail and possibly showed me how to draw the graph. Here is the complete question:



"Assuming that rice and noodles are substitutes, outline the effect of the following on the equilibrium PRICE and QUANTITY of RICE: an improvement in the technology for making noodles results in a fall in the price of noodles AND the wage rate to workers involved in growing rise increases. Use diagrams in your answer."



Thanks everyone. Much appreciated :DWhat is the effect of a wage increase and improved technology on equilibrium price and quantity?
Do your own homework.

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