Problem 7
List three products that you are familiar with and the approximate price of each. Which of the products, if any, do you have a demand for? Consider the two requirements of demand as you answer this question.
Problem 8
Why might Rafael's market demand schedule and curve not be an accurate reflection of the actual market? To answer this question, consider the assumption that was made when the schedule and curve were created.
Problem 8
Applying Economic Concepts The U.S. government has used many strategies to reduce smoking. It banned television ads for cigarettes, ran public service messages about the health risks of smoking, and imposed taxes on cigarettes. Which factors that affect demand was the government trying to influence?
Problem 9
Applying Economic Concepts Suppose the company that runs concession stands at a local sports arena wants to increase revenue on sales of soft drinks. The manager believes the only solution is to charge higher prices. As a business consultant, what advice would you give the manager? Use economic thinking to support your answer.
Problem 10
Challenge You learned in this section that no product ever has demand that is unit elastic. What possible reasons can you give for that? Draw on what you know about utility, demand, and elasticity as you formulate your answer.
Problem 10
Challenge Do you think changes in consumer taste are most often initiated by the consumers themselves or by manufacturers and advertisers? Explain your answer, using real-life examples.
Problem 10
Does quantity demanded always fall if the price rises? List several goods or services that you think would remain in demand even if the price rose sharply. Why does demand for those items change very little? (You will learn more about this topic in Section \(3 .\)
