Chapter 3: Q. g - For Critical Thinking (page 67)
Why do you suppose that prices of barbecued brisket have been rising in
many U.S. cities?
Due to excess demand.
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Consider the market for cable-based Internet access
service,which isanormal good.Explain whether
the following events would cause an increase ora
decrease in demand or an increase oradecrease in
the quantity demanded.
a.Firms providing wireless(an alternative to cable)
Internet access services reduce their prices.
b.Firms providing cable-based Internet access
services reduce their prices.
e.There isadecrease in the incomes earned by con
sumers of cable-based Internet access services.
d.Consumers'tastes shift away from using wire
less Internet access in favor of cable-based
Internet access services.
What are the effects of a price decrease from \(4 per portable power bank to \)2 per portable power bank on the quantities of portable power banks demanded by buyer 1 and by buyer 2 individually and combined?
Consider the following diagram of a market for one-bedroom rental apartments in a college community.
a. At a rental rate of \(1,000 per month, is there an excess quantity supplied, or is there an excess quantity demanded? What is the amount of the excess quantity supplied or demanded?
b.If the present rental rate of one-bedroom apartments is\)1,000 per month, through what mechanism will the rental rate adjust to the equilibrium rental rate of\(800?
c.At a rental rate of\)600 per month, is there an excess quantity supplied, or is there an excess quantity demanded? What is the amount of the excess quantity supplied or demanded?
d.If the present rental rate of one-bedroom apartments is \(600 per month, through what mechanism will the rental rate adjust to the equilibrium rental rate of\)800?
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.
Suppose that inalater market period,the quantities
supplied in the table in Problem 3-1 are unchanged.
The amount demanded,however,has increased by 30
million at each price.Construct the resulting demand
curve in the illustration you made for Problem 3-1.Is
this an increase or a decrease in demand? What are
the new equilibrium quantity and the new market
price?Give two examples of changes in ceteris paribus
conditions that might cause suchachange.
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