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Determinants of Supply and Demand Consider the market for minivans. Assume minivans are a normal good. For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected by this event because it creates only a supply change, select the "None" option under the "Demand Determinant" column. Similarly, if supply is unaffected by this event because it creates only a demand change, select the "None" option under the "Supply Determinant" column. Event Demand Determinant Supply Determinant People decide to have more children. A strike by steelworkers raises steel prices. Engineers develop new automated machinery for the production of minivans. The price of sports utility vehicles rises. A stock-market crash lowers people's wealth. Show the effect of the following event on the market for minivans: People decide to have more children. (?) Show the effect of the following event on the market for minivans: A strike by…

If the price per unit of good A is P175 quantity purchased is valued at 5,250 units and quantity supplied equals 2,500 units. If price changes by P1, quantity demanded changes by 4 units for consumer demand and quantity supplied changes by 2 units.

6. What is the difference between a change in quantity demanded and a change in demand? ) of the own commodity under The fundamental determinant of demand is the (_p consideration: a change in price causes movement along the commodity's demand curve. This movement is called a (change in quantity demanded, change in demand). Decreased price leads to movement down the demand curve: There is a(n) (_increase, decrease ) in quantity demanded. Increased price leads to movement up the demand curve: There is a(n) ( increase, decrease ) in quantity demanded. In addition, there are determinants ( also called factors or shifters) of demand, which are factors that may shift the demand curve, i.e., cause a "change in demand." These are the number of buyers, the tastes (or desire) of the buyers for the commodity, the income of the buyers, the changes in price of related commodities (substitutes and complements), and expectations of the buyers regarding the future price of the commodity under…

4) Neville's passion is fine wine. When the prices of all other goods are fixed at current levels, Neville's demand function for high-quality claret is q = .02m-2p, where m is his income, p is the price of claret (in British pounds), and q is the number of bottles of claret that he demands. Neville's income is 7,500 pounds, and the price of a bottle of suitable claret is 30 pounds. a) How many bottles of claret will Neville buy? b) If the price of claret rose to 40 pounds, how much income would Neville have to have in order to be exactly able to afford the amount of claret and the amount of other goods that he bought before the price change? At this income, and a price of 40 pounds, how many bottles would Neville buy? c) At his original income of 7,500 and a price of 40, how much claret would Neville demand? d) When the price of claret rose from 30 to 40, the number of bottles that Neville demanded decreased by: The substitution effect (increased, reduced) his demand by:bottles and the…

According to economic theory, the demand x for a quantity in a free market decreases as the price p increases (see the figure). Suppose that the number x of DVD players people are willing dx (A) Find 9,000 to buy per week from a retail chain at a price of $p is given by x = 10 sp<70. 0.3p + 1' dx Answer parts (A), (B), and (C). dp 4500- (B) Find the demand and the instantaneous rate of change of demand with respect to price when the price is $30. Write a brief interpretation of these results. The demand is x = when the price is $30. 2250- 9,000 The instantaneous rate of change of demand with respect to price is when the price is X = 0.3p + 1 $30. Write a brief interpretation of these results. p. 0- 40 80 At a price level of $30, the demand is DVD players per week and demand is Price (dollars) V at the rate of (C) Use the results from part (B) to estimate the demand if the price is increased to $31. Demand .....

12)Suppose a consumer has $100 to spend on two goods, shoes and shirts. If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each, which of the following combinations is unaffordable to the consumer? A) 0 pairs of shoes and 0 shirts B) 2 pairs of shoes and 4 shirts C) 5 pairs of shoes and 0 shirts D) 0 pairs of shoes and 7 shirts E) 2 pairs of shoes and 3 shirts

2. Which of the following statements is (are) correct? (x) If the coefficient of cross-price elasticity of demand is 1.4, then the two goods are substitutes and the response to a price change is elastic. (y) If the coefficient of cross-price elasticity of demand is equal to one, then the two goods are substitutes and a price increase of ten percent for one good will cause the quantity purchased of the other good to increase by ten percent. (z) If the coefficient of cross-price elasticity of demand for a particular good is equal to negative 0.85, then the two goods are complements and the response to a price change of the other good is elastic. A. (x), (y) and (z) C. (x) and (y) only (y) and (z) only (x) and (z) only Е. (х) only D.

Microeconomics

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09. Which of the following statements is False?     a) Supply is a relationship between price and quantity.     b) Demand represents the willingness and ability of buyers to buy quantities of a good at various prices.     c) The demand relationship represents the specific quantity of a good demanders have bought.     d) All of the above     e) None of the above

1) Suppose the consumer begins in equilibrium at eo. If there is an increase in income and good X is a normal good, illustrate the effect on the demand curve for X. (Note: The same sort of question could be asked for effect of a change in consumer tastes or a change in the price of another good upon which demand for good X depends.) Yo Px PXo eo Xo Xo U₁ U₁ Qx X

QUESTION 9 9. Imagine a small bakery that produces two types of bread: Whole Wheat Bread (Good A) and White Bread (Good B). Both of these bread types require similar production processes and are considered substitutes in production. The bakery has been operating in a stable market until recently. The demand for Good A (Whole Wheat Bread) increases due to a health trend that promotes whole wheat products. As a result, the increase in demand for Good A shift the a) demand curve for good B rightward. b) demand curve for good B leftward. c) supply curve of good B rightward. d) supply curve of good B leftward. (4

3. Suppose all apples in the store look the same but half of them are actually not edible (and have no other use), and there is no return. All consumers know that, and the demand curve for apples in the store is QQ = 100 – PP. What would be the demand curve if apples in the store are all edible?

11. Which of the following will cause a change in the demand for automobiles? a) a government subsidy to auto maker b) a change in the price of gasoline c) A change in the price of a resource used to make cars. d) a change in productivity in auto factories

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2. Assuming that Old Navy jeans and Gap jeans are suitable substitutes, what would happen to the demand curve for Gap jeans in the following price scenario: Gap Jeans @ $58.00; Old Navy Jeans @ $75.00

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3) What problem could arise with consumers' net demand functions as any price becomes zero? What axiom of consumer theory is involved here? How might it be changed to exclude this possibility?

Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O A heart valve for heart attack victims O Sports car The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between. Categories Most Elastic In Between Least Elastic…

Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? Chemotherapy for cancer patients O Yacht The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between. Categories Most Elastic In Between Least Elastic Pants Clothing…