Principles of Macroeconomics (11th Edition)
11th Edition
ISBN: 9780133023671
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 3, Problem 16P
Subpart (a):
To determine
Changes in demand curve.
Subpart (b):
To determine
Changes in demand curve.
Subpart (c):
To determine
Changes in quantity demand.
Subpart (d):
To determine
Changes in demand curve.
Subpart (e):
To determine
Changes in demand curve.
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The price of crude oil has been increasing. The price of a good rises in two cases, when demand rises or when supply falls, or both. It has been given that there has been a growing demand for crude oil for turning into refined petroleum (increase in demand), along with a decline in its production (fall in supply). It implies that both an increase in demand and a decrease in supply is responsible for the price rise.
Draw a graph to show the information.
The following table shows the weekly demand and supply in the market for ice cream in New York City.
Price
Quantity Demanded
Quantity Supplied
(Dollars per gallon of ice cream)
(Gallons of ice cream)
(Gallons of ice cream)
4
2,000
200
8
1,600
600
12
1,200
800
16
800
1,200
20
400
1,800
Based on the preceding table, plot the demand for ice cream on the following graph using the blue points (circle symbol). Next, plot the supply of ice cream using the orange points (square symbol). Finally, use the black point (cross symbol) to indicate the equilibrium price and quantity in the market for ice cream.
DemandSupplyEquilibrium0400800120016002000240024201612840PRICE (Dollars per gallon of ice cream)QUANTITY (Gallons of ice cream
Suppose there is a product whose price is increasing but it has no impact on quantity demand (increase ordecrease). Draw the graph of this quantity demand.
Chapter 3 Solutions
Principles of Macroeconomics (11th Edition)
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