ECON545

  1. (TCO A) There is an increase in the cost of materials for producing bicycles.
    (4 pts.) What happens to bicycle supply?
    (6 pts.) What happens to bicycle demand? (Points : 10)
  2. (TCO A)  Ceteris paribus, Diet Cola Brand X and Diet Cola Brand Y are substitutes in consumption. The price of Diet Cola Brand Y falls.
    (4 pts.) a. What happens to the demand for Diet Cola Brand X?
    (6 pts.) b. What happens to the demand for Diet Cola Brand Y? (Points : 10)
  3. (TCO A)  The number of new home sellers in a given market decreases.
    (4 pts.) What happens to the supply of new homes?
    (6 pts.) What happens to the demand for new homes? (Points : 10)
  4. (TCO A) A market is in equilibrium with equilibrium Quantity of MEQ and equilibrium Price of MEP.

(2 pts.) a. What happens to Market Equilibrium Quantity (MEQ) if there is an increase in Demand?

(4 pts.) b. What happens to Market Equilibrium Price (MEP) if Supply decreases as Demand increases?

(4 pts.) c. What happens to Market Equilibrium Quantity (MEQ) after there has been an increase in Supply followed by a decrease in Demand which is followed by another increase in Supply?

 

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