Problem 1
What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat $500 ? a. Small automobiles become more fashionable. b. The price of large automobiles rises (with the price of small autos remaining the same). c. Income declines and small autos are an inferior good. d. Consumers anticipate that the price of small autos will greatly come down in the near future. e. The price of gasoline substantially drops.
Problem 2
True or False: \(A\) "change in quantity demanded" is a shift of the entire demand curve to the right or to the left.
Problem 3
What effect will each of the following have on the supply of auto tires? a. A technological advance in the methods of producing tires. b. A decline in the number of firms in the tire industry. c. An increase in the prices of rubber used in the production of tires. d. The expectation that the equilibrium price of auto tires will be lower in the future than currently. e. A decline in the price of the large tires used for semi trucks and earth- hauling rigs (with no change in the price of auto tires). T. The levying of a per-unit tax on each auto tire sold. 8\. The granting of a 50 -cent-per-unit subsidy for each auto tire produced.
Problem 4
"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms "supply" and "demand" used correctly? Explain.
Problem 5
Suppose that in the market for computer memory chips, the equilibrium price is $$\$ 50$$ per chip. If the current price is $$\$ 55$$ per chip, then there will be___________of memory chips. a. A shortage. b. A surplus. c. An equilibrium quantity. d. None
Problem 9
A price ceiling will result in a shortage only if the ceiling price is_________________the equilibrium price. \(L O 3.6\) a. Less than. b. Equal to. c. Greater than. d. Louder than.
