**2. For each of the statements below, select the option that best describes what would happen to supply and demand for the good in *italics*. Assume “ceteris paribus” unless otherwise told.**a. Demand shifts in (falls) b. Demand shifts out (rises) c. Quantity demanded increases d. Quantity demanded decreases e. Supply shifts in (falls) f. Supply shifts out (rises) g. Quantity supplied increases h. Quantity supplied decreases ____ 1. If the price of pizza falls, what happens to the demand for *Dr. Pepper* (a complement)? ____ 2. If the price of chicken rises, what happens to *chicken nugget* supply? ____ 3. If the government provides a subsidy for chocolate chip cookie bakers, what happens to the supply of *chocolate chip cookies*? ____ 4. If the government provides a subsidy for chocolate chip cookie bakers, what happens to the demand for *chocolate chip cookies*? ____ 5. If the price of paper rises because of a change in demand, what happens to *paper* supply?

Answered: 2. For each of the statements below,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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**2. For each of the statements below, select the option that best describes what would happen to supply and demand for the good in *italics*. Assume “ceteris paribus” unless otherwise told.**

a. Demand shifts in (falls)
b. Demand shifts out (rises)
c. Quantity demanded increases
d. Quantity demanded decreases
e. Supply shifts in (falls)
f. Supply shifts out (rises)
g. Quantity supplied increases
h. Quantity supplied decreases

____ 1. If the price of pizza falls, what happens to the demand for *Dr. Pepper* (a complement)?

____ 2. If the price of chicken rises, what happens to *chicken nugget* supply?

____ 3. If the government provides a subsidy for chocolate chip cookie bakers, what happens to the supply of *chocolate chip cookies*?

____ 4. If the government provides a subsidy for chocolate chip cookie bakers, what happens to the demand for *chocolate chip cookies*?

____ 5. If the price of paper rises because of a change in demand, what happens to *paper* supply?

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“Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts for you. To get the remaining sub-part solved please repost the complete question and mention the sub-parts to be solved.”.

The supply curve represents the relationship between quantity supplied and minimum willingness to accept. The supply curve is equivalent ot the marginal cost curve. When marginal cost changes, the supply curve also changes. Because minimum willingness to accept changes as the cost of production changes.

The demand curve represents the relationship between consumers' maximum willingness to pay and the quantity demanded. The quantity demanded depends not on the only price of the product but it also depends on the price of related products (complement and substitutes )

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