Question 1. Predicting changes in market-clearing prices and quantities is harder when both demand and supply change at the same time. You run a halal butcher shop in Alberta. There is expected to be an increase in the number of practicing Muslims in Alberta who prefer halal meat. Rents for retail space are also falling all over town. Predict what will happen to the market-clearing price for halal meat. Predict what will happen to the market-clearing quantity. Explain your predictions.
Question 2. In response to the business boom in Ontario, the city of Toronto offered $200-per-month rent subsidies to low-income families so they coukd afford to live and work in the city. If you were asked to advise the city on this policy, what would you tell them about the impact it will have on rents? Will the rents go up or down? Explain your reasoning to the city officials.
Question 3. What is the relationship between price and quantity demanded for inelastic demand and for elastic demand?
Question 4. In the women's clothing market, which is likely to be more inelastic, demand for the latest fashions or demand for clothing in general? If you were the marketing manager of a women's clothing chain, use your answer to explain to store managers why they should or should not exclude the latest arrivals in their upcoming sale.