Question

In: Economics

Consider the market for minivans. For each of the events listed below, identify which of the determinants of demand or supply are affected.

Consider the market for minivans. For each of the events listed below, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply is increased or decreased. Then show the effect on the price and quantity of minivans.

a. People decide to have more children.

b. A strike by steelworkers raises steel prices.

c. Engineers develop new automated machinery for the production of minivans.

d. The price of SUVs rises.

e. A stock market crash lowers people’s wealth.

Solutions

Expert Solution

a). People decide to have more children :

The demand for minivans will increase, so the demand curve will shift to the right. Though there will be no change in the supply curve. There will also be a rise in Price and Quantity.

The graph is shown below :

b). A strike by steelworkers raises steel Price :

The production cost of minivan will increase which will cause the supply of minivans to reduce. Demand will not be affected. As a result, the price of minivans will increase and there will be a decline in the quantity sold.

The Graph is shown below :



c). Engineers develop new automated machinery for the production of minivans :

Since engineers have done an improvement in technology, which will eventually reduce the total cost in the product manufacturing, it will result in an increase in supply. Again the demand will be un affected and there will be a decline in price and increase in quantity.

As shown below in the graph :



d). The price of sports utility vehicles rises :  

Minivans are substitutes of sports utility vehicles. If there is a rise in the price of sport utility vehicles, the demand for minivans will Increase. Supply will not be affected. As a result the price and quantity of minivans will rise.

The graph is shown below :




e). A stock market crash lowers people's wealth :

As stock market crash is affecting people's wealth and eventually their income, it will lead to a decrease in demand for minivans. Supply is not affected. As a result, both the equilibrium price and the equilibrium quantity decline.

The graph is shown below :

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Consider the market for minivans. For each of the events listed below: → identify which of...
Consider the market for minivans. For each of the events listed below: → identify which of the determinants of supply are affected → indicate whether supply increases or decreases → draw a diagram to show the effect on the supply curve. (Make sure to label the axes.) a. (0.5 pt) A strike by steelworkers raises steel prices. b. (0.5 pt) Engineers develop new automated machinery for the production of minivans Please draw the graph as well
Consider the market for minivans. For each of the events listed here, identify which of the...
Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected and indicate whether demand or supply for minivans increases or decreases. a. People decide to have more children. b. A strike by steel workers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of sports utility vehicles rises. e. A stock market crash lowers people’s wealth.
Consider the market for new homes. For each of the events listed her, identity which determinants...
Consider the market for new homes. For each of the events listed her, identity which determinants of demand or supply are affected. Indicated also whether the demand or supply increase or decrease. Draw a graph to show the price and quantity of these new homes. a. People decide to have more children b. Engineers develop siding that prevents a house from burning down c. the cost to rent existing homes decreases by $800 d. United States goes to war... e....
Identify the impact on either the supply or demand of loanable funds following the events listed below.
Identify the impact on either the supply or demand of loanable funds following the events listed below. Economic conditions deteriorate, prompting households to save a larger portion of their income. In an effort to balance the budget, the government decrease increases taxes paid by businesses. Economic conditions improve, increasing the demand for goods and services.Innovations in robotics technology vastly improves productivity within manufacturing firms.
Consider households’ demand for chicken. For each of the events listed below, state and explain the...
Consider households’ demand for chicken. For each of the events listed below, state and explain the likely effect on the demand for chicken. A medical study reports that eating chicken reduces the likelihood of suffering from particular types of heart problems. Average household income increases. A widespread disease leading to an increase in the price of beef Consider the world supply of cocoa beans, the main input in the production of chocolate. For each of the events listed below state...
Each of the events listed below has an impact on the market for bicycles. For each...
Each of the events listed below has an impact on the market for bicycles. For each event, which curve is affected (supply or demand for bicycles), what direction is it shifted, and what is the resulting impact on the equilibrium price and quantity of bicycles? 2.1. The price of automobiles increases. 2.2. Consumers' incomes decrease, and bicycles are a normal good. 2.3. The price of steel used to make bicycle frames increases. 2.4. An environmental movement shifts tastes toward bicycling....
Discuss the determinants of demand (listed below) for a specific good: peanut butter. For each of...
Discuss the determinants of demand (listed below) for a specific good: peanut butter. For each of the shifters, give an explicit example of a change in an external factor that shifts demand for peanut butter, then indicate whether your particular example would increase (shift rightward) or decrease (shift leftward) the demand for peanut butter. Number of consumers or size of the population Consumer taste and preferences Consumer income Related product Changes in Expectations
Explain the main determinants of demand and supply in a market.
Explain the main determinants of demand and supply in a market.
Consider the market for cell phones. For the following events, use Supply and Demand analysis to...
Consider the market for cell phones. For the following events, use Supply and Demand analysis to predict changes in equilibrium price and quantity of cell phones. a. The American Cancer Society announces scientific proof linking cell phone usage to cancer. b. The stock market soars, causing a rise in the general income of consumers. c. More efficient robots are developed and used on the cell phone assembly lines. d. The price of a cell phone increases. e. Consumers expect the...
For each of the following events or transactions, identify the fund that will be affected. 1....
For each of the following events or transactions, identify the fund that will be affected. 1. A city government provides electricity services to residents for a fee. 2. A printing shop was established to handle the printing needs of a county government. 3. A philanthropist donates $1 million for zoo maintenance, only earnings can be used. 4. A city government collects sales taxes on behalf of the state and for some of its counties and municipalties. (Only identify one of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT