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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985
BuyFind

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985

Solutions

Chapter
Section
Chapter 4, Problem 1CQQ
Textbook Problem

A change in which of the following will NOT shift the demand curve for hamburgers?

a. the price of hot dogs

b. the price of hamburgers

c. the price of hamburger buns

d. the income of hamburger consumers

Expert Solution
To determine

The determinants of the demand curve.

Answer to Problem 1CQQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

A change in price of hamburgers leads to a movement along the demand curve and not a shift of the demand curve because price is measured on the vertical axis of a demand curve.  Thus, option ‘b’ is correct.

Option (a):

Hot dogs can be considered as substitutes of hamburgers. A change in the price of a substitute good shifts the demand curve of a good. Thus, a change in price of hot dogs shifts the demand curve of hamburgers. So, option ‘a’ is incorrect.

Option (c):

Hamburger buns can be considered as complementary goods of hamburgers. A change in the price of a complementary good shifts the demand curve of a good. Thus, a change in the price of hamburger buns shifts the demand curve of a hamburger. So, option ‘c’ is incorrect.

Option (d):

A change in the income of a consumer of a good shifts the demand curve of that good. Thus, a change in the income of hamburger consumers shifts the demand curve of hamburger.  So, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Complementary good: It is a good with a negative cross elasticity of demand, that is, a good whose demand is increased when the price of another good is decreased.

Substitute good: It is a good with a positive cross elasticity of demand, that is, a good whose demand is decreased when the price of another good is decreased.

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