Use supply and demand curves to illustrate how each of the following changes will affect the equilibrium price and quantity of the stated product, ceterus paribus. Before you guess, answer the following questions: (1) Which determinant has changed? (2) Will it affect supply or demand? (3) Will supply or demand increase or decrease? (4) GRAPH IT! What happens to price and quantity? 1. The government provided subsidies for the farmers to improve their irrigation facilities. How would this improvement affect the equilibrium price and quantity of rice? 2. Wood furniture prices increase. How would this affect the equilibrium price and quantity of steel furniture? 3. During a recession, economies experience increased unemployment and a reduced level of activity. How would a recession be likely to affect the equilibrium price and quantity of new cars?
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Before you guess, answer the following questions:
(1) Which determinant has changed?
(2) Will it affect supply or demand?
(3) Will supply or demand increase or decrease?
(4) GRAPH IT! What happens to price and quantity?
1. The government provided subsidies for the farmers to improve their irrigation facilities. How would this improvement affect the equilibrium price and quantity of rice?
2. Wood furniture prices increase. How would this affect the equilibrium price and quantity of steel furniture?
3. During a recession, economies experience increased
4. The government imposes a nationwide lockdown due to pandemic. How would this affect the
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