and instructor assignment. is con- /7.) What is the difference between willingne

Question

and instructor assignment. is con- /7.) What is the difference between willingness to accept and emand willingness to pay? For a trade to take place, does the willingness to accept have to be lower, higher, or equal to the willingness to pay? 8. Explain how the following factors will shift the supply re you ts for gen- Think at re- curve for sparkling wine. a. New irrigation technology increases the output of grapes in a vineyard. labor, the wages of wine-grape pickers fall. employment. b. Following an increase in the immigration of unskilled indi- anc. The government sets a minimum wage for seasonal

Explanation / Answer

7) Willingness to pay is nothing but the amount that a person wants to pay to buy a product. Willingness to accept is the price at which seller is ready to sell the product. The transaction will take place in a trade when the buyer and seller accepts the price which means in a trade the willingness to pay should be equal to willingness to accept.

8)

a) Due to increase in the output grapes in vineyard due to technological advancements there will be an shift in supply curve to right.

b) Due to immigration the number of unskilled workers increase which means the supply is more thus making the wage level to fall. So supply curve shifts to right.

c) Due to minimum wage rate set by government the seasonal employees cannot work below that wage rate which means the aggregate supply curve shift to left as the minimum price is set.

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