6. The graphs below show four possible shifts in demand or in supply that could occur in particular markets. Relate each of the events described below to one of them. Panel (a) Panel (b) Price Price S₁ X D₁ D₂ Quantity per period Panel (c) S₁ X D₁ Quantity per period S₂ Price Price D₂ Quantity per period Panel (d) S₁ Quantity per period D₁ S₂ S₁ X D₁ 1. How did the heavy rains in South America in 1997 affect the market for coffee? 2. The Surgeon General decides french fries are not bad for your health after all and issues a report endorsing their use. What happens to the market for french fries? 3. How do you think rising incomes affect the market for ski vacations? 4. A new technique is discovered for manufacturing computers that greatly lowers their production cost. What happens to the market for computers? 5. How would a ban on smoking in public affect the market for cigarettes?

6. The graphs below show four possible shifts in demand or in supply that could occur in particular markets. Relate each of the events described below to one of them. Panel (a) Panel (b) Price Price S₁ X D₁ D₂ Quantity per period Panel (c) S₁ X D₁ Quantity per period S₂ Price Price D₂ Quantity per period Panel (d) S₁ Quantity per period D₁ S₂ S₁ X D₁ 1. How did the heavy rains in South America in 1997 affect the market for coffee? 2. The Surgeon General decides french fries are not bad for your health after all and issues a report endorsing their use. What happens to the market for french fries? 3. How do you think rising incomes affect the market for ski vacations? 4. A new technique is discovered for manufacturing computers that greatly lowers their production cost. What happens to the market for computers? 5. How would a ban on smoking in public affect the market for cigarettes?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 4PA

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Similar questions

Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans. a. People decide to have more children. b. A strike by steelworkers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of sports utility vehicles rises. e. A stock market crash lowers peoples wealth.
Describe the mechanism by which demand creates its own supply.
Using Exercise 16.20, sketch the effects in parts (a) and (b) on a single supply and demand diagram. What prediction would you make about how the improved information alters the equilibrium quantity and price?
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. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying these loans. Because of a threat of a war, people become uncertain about their economic future. The overall level of saving, in the economy diminishes. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.
Which of the following changes in the financial market will lead to a decline in interest rates: a rise in demand a fall in demand a rise in supply a fall in supply
If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
Review Figure 3.4 again. Suppose the price of gasoline is 1.00. Will the quantity demanded he lower or higher than at the equilibrium price of 1.40 per gallon? Will the quantity supplied be lower or higher? Is them a shortage or a surplus in the market? If so, of how much? Figure 3.4 Demand and Supply of Gasoline