Homework: Supply and Demand: Theory (Ch 03)

Your task is to take this and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the

Demand Schedule & Law Of Demand

The following graph shows the market for cars in 2008. Between 2008 and 2009, the equilibrium price of cars remained constant, but the equilibrium quantity of cars increased. From this, you can conclude that between 2008 and 2009, the supply of cars , and the demand for cars

Increased & Increased

The claim that, ceteris paribus, the quantity demanded of a good falls when the price of that good rises

Law of Demand

Suppose that, due to an increase in the supply of gasoline, the price of a gallon of gas falls from $4 to $3. Because sedans and gasoline are , a decrease in the price of a gallon of gas shifts the demand curve for sedans to the

Complements & Right

Because you understand the law of demand, you can deduce that the correct graphical representation of the demand for CDs must be . Moreover, you know that at a price of $10 per CD, the is five million CDs.

D1 & Quantity Demanded

A graphical representation of the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices

Demand Curve

A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices

Demand Schedule

Suppose that both of the causes suggested by the students are partly responsible for the decrease in the price of hamburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the decrease in the price of hamburgers?

If the equilibrium quantity of hamburgers increases, then the supply shift in the market for hamburgers must have been larger than the demand shift.

Suppose the workers' union accepts a pay cut. This causes a the supply curve because the pay cut makes cars .

Rightward Shift Of & Less Expensive To Build

A decrease in average income causes a leftward the demand curve; therefore, you may conclude that sedans are good. (Hint: Try substituting different values for Average Income in the calculator and observing what happens.)

Shift Of & A Normal

An increase in average income causes a rightward the demand curve; therefore, you may conclude that sedans are good. (Hint: Try substituting different values for Average Income in the calculator and observing what happens.)

Shift Of & A Normal

Suppose that, due to an increase in the number of a subways, the price of a subway ride falls from $2.00 to $1.50. Because driving a car and taking the subway are , a decrease in the price of a subway ride shifts the demand curve for sedans to the .

Substitutes & Left

The equilibrium price in this market is $ per calendar, and the equilibrium quantity is calendars bought and sold per month.

$50 & 250

Suppose that both of the causes suggested by the students are partly responsible for the increase in the price of calzones. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the increase in the price of calzones?

If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply shift.

The following graph shows the market for laptops in 2009. Between 2009 and 2010, the equilibrium quantity of laptops remained constant, but the equilibrium price of laptops decreased. From this, you can conclude that between 2009 and 2010, the supply of laptops , and the demand for laptops

Increased & Decreased

Consider the graph. Suppose that the price of a sedan decreased from $20,000 to $15,000. This would cause a the demand curve.

Movement Along

Consider the graph. Suppose that the price of a sedan increased from $15,000 to $20,000. This would cause a the demand curve.

Movement Along

The amount of a good that buyers are willing and able to purchase at a given price

Quantity Demanded

Consider the previous graph. Suppose that the price of a sedan decreases from $23,000 to $18,000. This would cause the of sedans to decrease, which is reflected on the graph by a the supply curve.

Quantity Supplied & Movement Along