Assignment:
PART 1
1. For each of the following cases show in a demand schedule the change in demand for hamburgers in your hometown due to the following events.
a. Income falls in town. Assume that hamburgers are an inferior good for most people.
b. All hamburger sellers raise the price of their french fries.
c. The price of tacos increases.
d. Hot dog stands cut the price of hot dogs.
2. Given each change in conditions described below a thru c below, predict the initialdirection of change in market activity. To answer chose one from each pair: ( increase, decrease) in market (Demand, Supply).
a. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits.
b. The granting of a 50-cent-per-unit subsidy for each auto tire produced.
c. Frost threatens to damage the coffee crop, and consumers expect the price to rise sharply in the future.
3. For the following case show in a supply schedule the change in supply.
a. New technology for mixing and freezing ice cream lowers manufacturers' costs of producing blueberry ice cream.
4. How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market?
a. Supply decreases and demand is constant.
b. Demand decreases and supply is constant.