Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 4, Problem 17P
To determine
(a)
To define the shift from
To determine
(b)
Define movement of A to B called.
To determine
(c)
Define movement from B to A
To determine
(d)
Define the shift from
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Replacement car parts are an inferior good. The country is going through a recession. Simultaneously, the price of a key raw material used in making replacement car parts goes down. What happens to the price and output of replacement car parts? Briefly explain. Briefly explain. In addition, show this graphically by choosing the appropriate graph from the four graphs (A - D) in the picture below
The following graph plots the market for electric guitars in Houston, where there are always over 1,000 music stores. Suppose a new article is published claiming that Houston has abnormally high levels of pollution compared to the rest of the region. Due to air quality concerns, a significant number of families move out of the city.
Show the effect of this change on the market for electric guitars by shifting one or both of the curves on the following graph, holding all else constant.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
DemandSupplyPRICE (Dollars per guitar)QUANTITY (Guitars)Demand Supply
Now suppose Congress passes a new tax that decreases the income of Houston residents.
If electric guitars are a normal good, this will cause the demand for electric guitars to .
Using a graph, explain carefully the difference between a movement along a demand curve and a shift in the demand curve
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