Chapter 3: Q. c - For Critical Thinking (page 57)
What has happened to the position of the U.S. market demand curve for
chewing gum?Explain briefly.
A change in preferences of consumers led to fall in demand.
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Give an example of a complement and substitute in consumption for each of the following items.
a.Bacon
b.Tennis racquets
c.Coffee
d.Automobiles
Why do you suppose that prices of barbecued brisket have been rising in
many U.S. cities?
Explain the law of demand
Understand how the interaction of demand
and supply determines the equilibrium
price and quantity
Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Illustrate each, and show what would happen to the equilibrium quantity and the market price.
a. The price of touch screens used in smartphones declines.
b. The price of machinery used to produce smartphones increases.
c. The number of manufacturers of smartphones increases.
d. There is a decrease in the market demand for smartphones.
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