Sapling - Chapter 3 HW

The cost of lithium-ion batteries, an input into the production of electric vehicles, has been dropping more steeply than expected. The figure below shows the market for electric vehicles. Move the supply and/or demand curves to reflect the effect that a reduction in the price of lithium-ion batteries will have on the market of electric vehicles. Also select the end result of equilibrium price and quantity.

Equilibrium price: -decreases Equilibrium quantity: -increases

Stone and brick are substitutes in home construction. Consider the market for bricks depicted below. Suppose the price of stone increases due to new regulations for the stone quarrying industry. Illustrate the impact this will have on the market for bricks.

Equilibrium price: -increases Equilibrium quantity: -increases

The following table shows information on the conditions of demand and supply for online music files, where the quantity of online music is measured in thousands of mp3 files. What are the equilibrium price and quantity?

Equilibrium quantity: 255 Equilibrium price: 0.95

Below is the demand schedule for chicken feet, a dim sum delicacy served at some Chinese restaurants. Although some people find the texture strange, others have developed a taste for it in the past 10 years. 1.)How many millions of pounds more of chicken feet were demanded in 2011, at 50 cents a pound, than in 2001? 2.) Based on the demand schedule, you conclude:

1.) 9.3 2.) the demand curve shifted to the right.

Below are the individual supply curves for Charmant and Mignon, makers of cute stuffed animals. Assume they are the only suppliers in this industry. 1.) Move the points given to draw the market supply curve for cute stuffed animals. 2. )Assume a third supplier chooses to join the industry, Pour Enfants. What will happen as a result? Assume there is free entry and exit in this market.

2.) The market supply curve will shift to the right.

Select the answer that best describes the law of demand.

A decrease in price will increase quantity demanded.

Below are the individual demand schedules of dark chocolate for Vanessa and Angela. Assuming they are the only people in the market for dark chocolate, draw each of their individual demand curves on the graph below, as well as the market demand curve, and answer the below multiple choice question. After a while, Angela gets sick of eating the bitter chocolate and decides to cut back on dark chocolate and enjoy white chocolate more. What will happen as a result of Angela\'s decision? Select all of the correct answers.

Angela's individual demand curve for white chocolate shifts to the right. Angela's individual demand curve for dark chocolate shifts to the left. The market demand curve for dark chocolate shifts to the left.

Categorize each scenario as describing a movement along a demand curve or a shift of the demand curve.

Shift of the Demand Curve: -college students purchase many more energy drinks during finals week than during the rest of the semester -students eat out more often as the federal government increases how much grant money it provides students. Movement Along the Demand Curve -College students reduce how much detergent they use for each load of laundry in response to higher detergent prices -College students rush and buy discount furniture to take advantage of a one-day sale.

Sort the following scenarios into whether the change in quantity described is caused by a shift in the supply curve or movement along a supply curve.

Shift of the Supply Curve: -Grocers are selling more gluten free pasta than ever before, even though the price of gluten free pasta has dropped substantially -After discovering the flash steaming tuna first, before using mechanical processes to extract meat, removes more tuna flesh, more cans of tuna hit the shelves at all major grocers. -Amplitude decides to join the smartphone market Movement Along the Supply Curve: -Rising wages for igloo builders in Nunavut, Canada, result in igloo builders moving to Nunavut. -A national consumer products company produces less of its premium quality soap as a result of lower soap prices. -Americans put up their gold and silver jewelry for sale as a result of rising prices.