Demand and Supply Application-Based Activity

An increase in the equilibrium price of "regular" cars.

Automobiles firms can use their inputs to make hybrid cars or "regular" (non-hybrid) cars. If the equilibrium price of hybrid cars will cause:

Tomatoes are an input in the production of salsa. If the price of tomatoes rises sharply, this will cause:

A decrease in the supply of salsa, a leftward shift of the supply curve for salsa.

The demand for grilled chicken to increase, a rightward shift of the demand curve for grilled chicken.

Fried chicken and grilled chicken are substitutes. If the American Heart Association announces that eating friend chicken increases the risk of stroke, this will cause:

An increase in the equilibrium price of fresh fruit

The fresh fruit market and frozen dinner market are currently in equilibrium. Fresh fruit is a normal good for consumers, and frozen dinners are inferior good. Given an upward sloping supply curve, if there is an economic boom that increases consumers' incomes, this will lead to:

The equilibrium quantity of new homes will decrease

The market for new homes is in equilibrium. New homes are a normal good for consumers. If a recession reduces consumers' incomes at the same time that the price of lumber (an input in making new homes) increases, we can say with certainty that:

If the price of chocolate increases, in the market for chocolate this will cause:

An upward (to the left) movement along the demand curve

Coffee and cream are complements. If the price of coffee increases, this will cause:

An upward movement (decrease in quantity demanded) along the demand curve for coffee.

French fries and ketchup are complements. If the American Heart Association announces that eating french fries increases the risk of stroke, this would cause:

Demand for ketchup to decrease, a leftward shift of the demand curve for ketchup.

Public transportation is an inferior good. If consumers' incomes decreases, this will cause:

Demand for public transportation to increase, a rightward shift of the demand curve for public transportation.