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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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Identify which of the following would generate an increase in the market demand for tablet devices, which are normal goods.
a. A decrease in the incomes of consumers of tablet devices
b. An increase in the price of ultrathin computers, which are substitutes
c. An increase in the price of online apps,which are complements
d. An increase in the number of consumers in the market for tablet devices
What direction might the supply of breakfast cereals have shifted to help explain why the market prices of these cereals have not changed very much during the past few years?
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?
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.
If the price of flash memory chips used in manufacturing smartphones decreases, what will happen in the market for smartphones? How will the equilibrium price and equilibrium quantity of smartphones change?
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