Chapter 3: Q 13. (page 78)
What does a downward-sloping demand curve mean about how buyers in a market will react to a higher
price?
The inverse relationship between price and quantity demanded is indicated by a downward sloping demand curve.
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Use the four-step process to analyze the impact of a reduction in tariffs on imports of iPods on the equilibrium price and quantity of Sony Walkman-type products.
The computer market in recent years has seen many more computers sell at much lower prices. What shift in demand or supply is most likely to explain this outcome? Sketch a demand and supply diagram and explain your reasoning for each.
a. A rise in demand
b. A fall in demand
c. A rise in supply
d. A fall in supply
When analyzing a market, how do economists deal with the problem that many factors that affect the market
are changing at the same time?
Most government policy decisions have winners and losers. What are the effects of raising the minimum wage? It is more complex than simply producers lose and workers gain. Who are the winners and who are the losers, and what exactly do they win and lose? To what extent does the policy change achieve its goals?
Will demand curves have the same exact shape in all markets? If not, how will they differ?
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