1. Market EquilibriumHow will the quantity and price of cars change in response to each of the following separateevents?A. A new supply of oil is discovered and the price of gasoline decreases.B. The U.S. enters into a free-trade agreement that reduces the price of steel imports.C. The U.S. government funds the development of a better commuter rail systemD. During the Great Recession, General Motors goes bankrupt and closes down.E. World War 3 breaks out and the government begins demanding more tanks.Fill out the table below. The answer for each blank should be either increase, decrease, or nochanges.EventA. Gas price decreasesB. Steel price decreasesC. Commuter rail expandsD. GM goes bankruptE. Demanding more tanksSupply Demand Quantity Quantity(MC)(MB) Supplied DemandedPriceNow, suppose that there are multiple events in the market. To be more specific, during theGreat Recession, General Motors goes bankrupt and closes. At the same time, the U.S.government funds the development of a better commuter rail system.1. Draw a graph of the car market in which these two events happen simultaneously, and theprice of cars increases as a result.2. Draw a graph of the car market in which these two events happen simultaneously, and theprice of cars decreases as a result.

Market equilibrium occurs due the forces of demand and supply curve when they interest each other…

How will the quantity and price of cars change in response to each of the following separate events? A. A new supply of oil is discovered and the price of gasoline decreases. B. The U.S. enters into a free-trade agreement that reduces the price of steel imports. C. The U.S. government funds the development of a better commuter rail system D. During the Great Recession, General Motors goes bankrupt and closes down. E. World War 3 breaks out and the government begins demanding more tanks.

How will the quantity and price of cars change in response to each of the following separate events? A. A new supply of oil is discovered and the price of gasoline decreases. B. The U.S. enters into a free-trade agreement that reduces the price of steel imports. C. The U.S. government funds the development of a better commuter rail system D. During the Great Recession, General Motors goes bankrupt and closes down. E. World War 3 breaks out and the government begins demanding more tanks.

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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