Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 4, Problem 7MCQ
To determine
To explain:
The option that correctly identifies the effect on the market for used cars and on the market for hybrids.
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Price ($/cup)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10 20
Original Supply
A decrease in the price of coffee beans.
New Demand
Original Demand
30 40 50 60 70 80 90
Quantity (cups/hour)
New Supply
The figure above refers to the market for coffee. What might cause a shift from the original demand
curve to the new demand curve? Check all that apply.
An increase in the price of tea (a substitute for coffee).
A decrease in income if coffee is an inferior good.
An expectation that coffee prices will fall in the future.
A decrease in the price of cream (a complement to coffee)
Describe how each of the following will affect the demand for hybrid cars:
A. A rise in income (assuming that hybrid cars are a normal good)
B. Consumers prices of hybrid cars to fall in the future.
C. The price of gasoline rises.
D. Increased number of campaigns in favor of protecting the environment.
The figure shows a market for oil.
Price ($/barrel)
72
64
56
48
40
D
80
84
88
92
Quantity (million barrels)
If the current price of oil is $44 per barrel, the quantity of oil demanded is
A million barrels, the quantity supplied is
A million
barrels, and the quantity bought is
AA million barrels. There is excess
(demand/supply)
A in the market, and the price is expected
to (rise/fall)
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- Explain the impact of higher corn prices on consumers. Draw a graph explaining the impact of higher corn prices on consumers. Explain which curve will shift on your graph and the change in price and quantity demanded. Explain the impact of higher corn prices on producers. Draw a graph explaining the impact of higher corn prices on producers. Explain which curve will shift on your graph and the change in price and quantity supplied.arrow_forwardPrice ($/cup) 3.5 3 88 2.5 2 1.5 1 0.5 0 10 20 Original Supply New Supply New Demand Original Demand 30 40 50 60 70 80 90 Quantity (cups/hour) The figure above refers to the market for coffee. What might cause shift from the original supply curve to the new supply curve? Check all that apply. An increase in the price of tea (a substitute for coffee). An expectation that coffee prices will fall in the future. A decrease in the price of coffee beans. A storm in that wipes out a large part of the coffee crop. A new technology that reduces the cost of making coffee.arrow_forwardAn increase in the ________ of a pumpkins to a decrease in ________ that leads to a ________. a. quantity; supply; change in demand b. demand; quantity demanded; change in supply c. supply; demand; change in price d. price; quantity demanded; movement along the demand curvearrow_forward
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