Homework Help is Here – Start Your Trial Now!
Business
Economics
For each of the following changes in the market for apples, explain why demand will increase, decrease, or remain unchanged 1. The price of peanut butter (a complement) increases. 2. Consumer incomes increase (and apples are a normal good). 3. It is confirmed scientifically that an apple a day DOES keep the doctor away. 4. The price of apples decreases. 5. A disease affecting apple trees causes people to expect that there will be no apples next year.

For each of the following changes in the market for apples, explain why demand will increase, decrease, or remain unchanged 1. The price of peanut butter (a complement) increases. 2. Consumer incomes increase (and apples are a normal good). 3. It is confirmed scientifically that an apple a day DOES keep the doctor away. 4. The price of apples decreases. 5. A disease affecting apple trees causes people to expect that there will be no apples next year.

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 8P
See similar textbooks
icon
Related questions
Question
100%

Answer this for me mate. Much appreciated.

For each of the following changes in the market for apples, explain why demand will increase, decrease, or remain unchanged. 1. The price of peanut butter (a complement) increases. 2. Consumer incomes increase (and apples are a normal good). 3. It is confirmed scientifically that an apple a day DOES keep the doctor away. 4. The price of apples decreases. 5. A disease affecting apple trees causes people to expect that there will be no apples next year.
Transcribed Image Text:For each of the following changes in the market for apples, explain why demand will increase, decrease, or remain unchanged. 1. The price of peanut butter (a complement) increases. 2. Consumer incomes increase (and apples are a normal good). 3. It is confirmed scientifically that an apple a day DOES keep the doctor away. 4. The price of apples decreases. 5. A disease affecting apple trees causes people to expect that there will be no apples next year.
1) There exists negative relationship between complementary goods, i.e. if the price of Petrol rises, then the demand for car falls. Because both the goods collectively becomes more expensive. In the given case, if the price of peanut butter which is a complementary good increases, then people find it expensive and tend to reduce the consumption of the good collectively. So the demand of apple decreases when price of peanut butter rises. 2) When the income of the consumer increases, then he/she is able to purchase more goods with that income. There exists positive relation between income of a consumer and demand of the good. As income increases, demand of the good increases. Here as the income increases, then the demand for apples increases. 3) When it is confirmed that an apple a day, keeps the doctor away then the tastes and preferences of the people will shift towards the consumption of more apple thus the demand of apples will increase.
Transcribed Image Text:1) There exists negative relationship between complementary goods, i.e. if the price of Petrol rises, then the demand for car falls. Because both the goods collectively becomes more expensive. In the given case, if the price of peanut butter which is a complementary good increases, then people find it expensive and tend to reduce the consumption of the good collectively. So the demand of apple decreases when price of peanut butter rises. 2) When the income of the consumer increases, then he/she is able to purchase more goods with that income. There exists positive relation between income of a consumer and demand of the good. As income increases, demand of the good increases. Here as the income increases, then the demand for apples increases. 3) When it is confirmed that an apple a day, keeps the doctor away then the tastes and preferences of the people will shift towards the consumption of more apple thus the demand of apples will increase.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS