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- 6. Why do we need a units-free measure of the responsiveness of the quantity demanded of a good or service to a change in its price?4. Describe what is meant by a normal good. Provide a real-life example in your own words. What is an inferior good? How does a change in income impact the demand for inferior goods?2. In a supply and demand diagram, draw the shift of the demand curve for hamburgers in your hometown due to the following events. In each case, show the effect on equilibrium price and quantity. a. The price of tacos increases. b. All hamburger sellers raise the price of their french fries. c. Income falls in town. Assume that hamburgers are a normal good for most people. d. Income falls in town. Assume that hamburgers are an inferior good for most people. e. Hot dog stands cut the price of hot dogs.
- 1. A substitute product is defined as a product that can be used for a similar purpose as theother product. The common example substitutes are butter and margarine. If the price ofbutter increases while that of margarine remain constant, use the demand curve toillustrate the effects of an increase in the price of butter to the demand for margarine.(ii) Demonstrate and discuss each of the following would have on demand or supply ofcoffee. Additionally, show how equilibrium price and quantity have changed.a. A better method of harvesting coffee beans is introduced.b. Medical researchers found that intake of more than two cups of coffee per daydrastically decreases risk of liver cancer.c. Currently, the price of coffee is ₹15 per cup above equilibrium.d. Consumer income falls because of a recession and coffee is considered anormal good.e. . Protesting liberal milk powder import policy, farmers dump millions of litresof milk, causing milk prices to rise.1. Consumers perceive coffee and tea as substitutes.How would a decrease in the supply of coffee affect the market for tea? Increasing the supply for tea, ultimately increasing the price of tea as well Decreasing the demand for tea, ultimately decreasing the price of tea as well. Increasing the demand for tea, ultimately increasing the price of tea as well Decreasing the supply for tea, ultimately decreasing the price of tea as well
- How the demand factors is impacting the consumer market. Illustrate and give 3 examples of each demand with product Pictures4. An increase in the price of gasoline will most likely cause the demand curve of tyres to change in which direction. A To the left, because gasoline and tyres are substitutes. B To the left, because gasoline and tyres are complements. C To the right, because gasoline and tyres are substitutes. D To the right, because gasoline and tyres are complements. E To the right, because an increase in the price of gasoline makes consumers poorer and thus not willing to pay as much for tyres. 5. For an inferior good, the quantity demanded A Does not change when income rises or falls. B Rises when income falls. C Falls when income falls. D Rises when income rises. E Responds directly to changes in income. 6. The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then A The marginal product, the average product and total product of the variable factor will eventually decrease. B Total product will eventually begin…(9) What determines the utility an individual receives from consuming a good? Select one: a. The individual’s own preferences. b. The demand and supply curves for that good. c. The producers conducting customer feedback surveys of that good and the feedback provided. (10) Denzel bought headphones two months ago, Solo2 Beats by Dre, for $130. He gives them to his little brother and goes online to buy another for himself but they are now $160. What is the percentage change in the headphone’s price? Select one: a. 23% b. 30% c. 21%
- are likely to be having children of their own 16. Use a diagram to illustrate how each of the following events affects the equilibrium price and quantity of pizza.QUESTION 11 If macaroni and cheese is an inferior good, then an increase in A. the price will cause the demand curve for macaroni and cheese to shift to the left. OB. a consumer's income will cause the demand curve for macaroni and cheese to shift to the right. C. a consumer's income will cause the demand curve for macaroni and cheese to shift to the left. OD. the price will cause the demand curve for macaroni and cheese to shift to the right.7. State the Law of Demand. Discuss the relationship between Price of the good and its Quantity demanded. Over the last 10 years, price of new models of smart Phones increased by 25%. At the same time, the number of sold phones has increased from 250KD to 400KD. Does this example demonstrate that the Law of Demand is false? Explain why or why not. Use graphs.