Chapter 4 Post-Class Assignment Part I: The Market Forces of Supply and Demand: Algorithmic End of Chapter

Therefore, a fall in the price of flour would cause the equilibrium price of bagels to ________ . and the equilibrium quantity of bagels to ________ .

fall & rise

Finally, show the effect the previous change in the market for TV screens has on the market for movie tickets.

Demand curve shifts to the left

Show the change in the market for Caribbean hotel rooms that is consistent with the following statement: "When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts plummets."

Demand curve shifts to the left

Show the effect of the following event on the market for minivans: A stock-market crash lowers people's wealth.

Demand curve shifts to the left

Suppose a stock market crash lowers people's wealth. Assume also that laptop computers are a normal good. Show the effect this change in people's wealth has on the market for laptop computers.

Demand curve shifts to the left

Suppose technological advances expand the functions and lower the price of tablet computers. Show the effect these technological advances regarding tablet computers have on the market for laptop computers.

Demand curve shifts to the left

Suppose the price of leather jackets falls. Show the effect this price change of leather jackets has on the market for sweatshirts. (Sweatshirts graph)

Demand curve shifts to the left

Because bagels and cream cheese are often eaten together, they are complements. Consider the effect of a fall in the price of flour, an input to making bagels. Show the effect of the fall in the price of flour on the market for bagels in the graph below.

Supply curve shifts to the right

Show the effect of the following event on the market for minivans: Engineers develop new automated machinery for the production of minivans.

Supply curve shifts to the right

Suppose a technological advance reduces the cost of manufacturing TV sets. Show the effect of this change on the market for TV screens.

Supply curve shifts to the right

Suppose favorable weather conditions result in a huge harvest of strawberries. Show the effect these favorable weather conditions has on the market for strawberries.

Supply curve shifts to the right

Suppose more college students decide to enter the industry of laptop computer manufacturing after graduation. Show the effect this increase in workers has on the market for laptop computers.

Supply curve shifts to the right

Suppose a union successfully negotiates an increase in the wages of workers producing computer chips. This would lead to a ________ in the supply of computers, causing the price of computers to ________ . Because computers and computer software are ________ , this change in price would cause the demand for computer software to ________ . However, computers and typewriters are ________ , so the change in the price of computers would ________ the demand for typewriters.

decrease, rise, complements, decrease, substitutes, & increase

When the demand curve and supply curve shift in the direction previously indicated, you can be certain about the effect on ________ without knowing the magnitude of the shifts.

only the equilibrium quantity

Suppose all colleges require students to use electronic textbooks and do assignments online. Show the effect this new technological requirement has on the market for laptop computers.

Demand curve shifts to the right

Suppose recent research shows that strawberry consumption can help prevent cancer. Show the effect this research has on the market for strawberries.

Demand curve shifts to the right

Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same time, unfavorable weather conditions damage a huge amount of orange crops. Show the effect of these two events on the market for oranges.

Demand curve shifts to the right Supply curve shifts to the left

Show the change in the market for electric cars that is consistent with the following statement: "When the price of electric cars is expected to rise in the near future, the current price of electric cars rises."

Demand curve shifts to the right Supply curve shifts to the left

Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees produce more oranges. Show the effect of these two events on the market for oranges.

Demand curve shifts to the right Supply curve shifts to the right

True or False: A decrease in supply of notebooks lowers the quantity of notebooks supplied but not the quantity demanded.

False

Consider the market for film streaming services, TV sets, and movie tickets. For each pair, identify whether they are complements or substitutes:

Film streaming services and TV sets= compliments Film streaming services and movie tickets= substitutes TV sets and movie tickets= substitutes

Consider the market for minivans. Assume minivans are a normal good. For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected by this event because it creates only a supply change, select the "None" option under the "Demand Determinant" column. Similarly, if supply is unaffected by this event because it creates only a demand change, select the "None" option under the "Supply Determinant" column.

People tend to have more children: Demand Determinant= Tastes Supply Determinant= None A strike by steelworkers raises steel prices: Demand Determinant= None Supply Determinant= Input Prices Engineers develop new automated machinery for the production of minivans: Demand Determinant= None Supply Determinant= Technology The price of sports utility vehicles rises: Demand Determinant= Price of substitute or compliment Supply Determinant= None A stock-market crash lowers people's wealth: Demand Determinant= Income Supply Determinant= None

Show the change in the market for building materials that is consistent with the following statement: "When there is a coup in a country rich in iron ore, the price of building materials rises."

Supply curve shifts to the left

Show the change in the market for gasoline that is consistent with the following statement: "When a war breaks out in the Middle East, the price of gasoline rises, and the price of a used Cadillac falls." (Gasoline graph)

Supply curve shifts to the left

Show the change in the market for orange juice that is consistent with the following statement: "When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country."

Supply curve shifts to the left

Show the effect of the following event on the market for minivans: A strike by steelworkers raises steel prices.

Supply curve shifts to the left

Suppose a hurricane in South Carolina damages the cotton crop. Show the effect this hurricane has on the market for sweatshirts. (Sweatshirts graph)

Supply curve shifts to the left

True or False: As long as the supply curve is upward-sloping, a decrease in the demand for notebooks leads to a fall in both the quantity demanded and the quantity supplied of notebooks.

True

True or False: If the demand for notebooks is perfectly inelastic, an increase in the supply of notebooks only lowers the price of notebooks and does not affect the quantity produced and sold.

True

True or False: When the demand curve and the supply curve shift in the direction previously indicated, the effect on the equilibrium price is clear even without knowing the magnitude of the shifts.

True

Suppose new knitting machines are invented. Show the effect this new technology has on the market for sweatshirts.

Supply curve shifts to the right

Suppose the price of raspberries falls. Show the effect this price change of raspberries has on the market for strawberries.

Demand curve shifts to the left

Consider the following events: Researchers shows that eating lobsters increases the risk of heart attack, and at the same time, there is a new regulation that limit the number of lobsters people can fish. Show the effect of these two events on the market for lobsters.

Demand curve shifts to the left Supply curve shifts to the left

Now show the change in the market for desktop computers that is consistent with the following statement: "When a technological advance improves the features of laptop computers, the price of laptop computers rises, and the price of a used desktop computer falls." (Desktop computers graph)

Demand curve shifts to the left Supply curve shifts to the right

Show the change in the market for gasoline that is consistent with the following statement: "When a war breaks out in the Middle East, the price of gasoline rises, and the price of a used Cadillac falls." (Used cadillacs graph)

Demand curve shifts to the left Supply curve shifts to the right

Next, show the effect the previous change in the market for TV screens has on the market for film streaming services.

Demand curve shifts to the right

Show the change in the market for healthcare that is consistent with the following statement: "When there is an influx of immigrants, the price of healthcare rises."

Demand curve shifts to the right

Show the change in the market for laptop computers that is consistent with the following statement: "When a technological advance improves the features of laptop computers, the price of laptop computers rises, and the price of a used desktop computer falls." (Laptop computers graph)

Demand curve shifts to the right

Show the change in the market for restaurant meals that is consistent with the following statement: "When an economic boom raises people's income, the price of restaurant meals rises."

Demand curve shifts to the right

Show the effect of the fall in the price of flour on the market for cream cheese in the graph below.

Demand curve shifts to the right

Show the effect of the following event on the market for minivans: People decide to have more children.

Demand curve shifts to the right

Show the effect of the following event on the market for minivans: The price of sports utility vehicles rises.

Demand curve shifts to the right

Suppose all colleges require morning exercise in appropriate attire. Show the effect this new exercise requirement has on the market for sweatshirts. (Sweatshirts graph)

Demand curve shifts to the right

Cheese is a complement for hamburgers. If the price of hamburgers rises, the quantity of hamburgers demanded ________ , which ________ the demand for cheese. Because of the change in the equilibrium quantity of cheese, the demand for milk by cheese producers ________ , causing the equilibrium price of milk to ________ . This means producers of butter face ________ input prices, and the supply of butter ________ . The resulting ________ in the price of butter causes people to substitute ________ , so the demand for jam ________ .

falls, lowers, falls, decrease, lower, increases, fall, away from jam and towards butter, & falls

If the actual price in this market were $5, quantity supplied would be ________ than quantity demanded, so there would be ________ pressure on prices. True or False: If the actual price in this market were above the equilibrium price, suppliers could raise the price without losing sales.

less & upward False

Therefore, a fall in the price of flour would cause the equilibrium price of cream cheese to ________ and the equilibrium quantity of cream cheese to ________ .

rise & rise