Question

In: Economics

Describe the effect of each of the following events on either the demand or supply of...

Describe the effect of each of the following events on either the demand or supply of gasoline in the USA. Further indicate the likely direction in the amount of gasoline exchanged AND the expected market price (both) when: a. domestic incomes fall. b. the price of electrical automobiles falls. c. A new shale oil field is discovered and put into service. d. The average price of rice falls in Japan. (Provide answers to all parts of the question)

Solutions

Expert Solution

a. domestic incomes fall.

The quantity demaned of gasoline falls as income falls. Income is a determinant of demand. The demand curve shifts to the left. Quantity supplied remains the same. The equilibrium price decreases and equilibrium quantity also decreases.

b. the price of electrical automobiles falls

Electrical automobiles is a substitute good. Changes in the prices of substitute goods is a demand determinant. If the price of electrical automobiles falls, then the quantity demanded of gasoline falls.  Quantity supplied remains the same. The equilibrium price decreases and equilibrium quantity also decreases.

c. A new shale oil field is discovered and put into service.

Supply increases as new resources are discovered. Quantity supplied increases and equilibrium price falls. Equilibrium quantity increases. Demand remains the same.

d. The average price of rice falls in Japan.

No change in quantity demanded or supplied.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Describe the effect of each of the following events on either the demand or supply of...
Describe the effect of each of the following events on either the demand or supply of gasoline in the USA. Further indicate the likely direction in the amount of gasoline exchanged AND the expected market price (both) when: a. domestic incomes fall. b. the price of electrical automobiles falls. c. A new shale oil field is discovered and put into service. d. The average price of rice falls in Japan. (Hint: Provide answers to all parts of the question)
For each of the following events, assume that either the supply curve or the demand curve...
For each of the following events, assume that either the supply curve or the demand curve (not both shifted). Explain which curve shifted and indicate the direction of the shift. a. From 1950 to 1979 the wages paid to fruit pickers increased while the number of fruit pickers employed decreased. b. During the same period the price of radio sets declined, while the number of radio sets purchased increased. c. Housing prices are rising but more houses are sold. d....
Using supply and demand diagrams, show the effect of the following events on the market for...
Using supply and demand diagrams, show the effect of the following events on the market for sweatshirts. A hurricane in South Carolina damages the cotton crop. The price of leather jackets falls. All colleges require morning exercise in appropriate attire. New knitting machines are invented. Each original post should include four diagrams with an explanation for each. Respond and engage with at least two of your classmates. NOTE: diagrams can be created using a MS Office product, or drawn by...
For each of the following events, -State if the demand for loanable funds or the supply...
For each of the following events, -State if the demand for loanable funds or the supply of loanable funds (or neither) will be affected -Then state if the curve will increase or decrease -Finally indicate the direction of the shift(left or right) Events: A. The government deficit increases. B. People decide to save more C. Net capital outflow increases at each interest rate. D. Domestic investment increases at each interest rate.
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.
Describe the effect of the following events would on the aggregate demand (AD) curve in the...
Describe the effect of the following events would on the aggregate demand (AD) curve in the U.S. Answer with SR= shifts right, SL=shifts left, MU=move up curve, or MD=move down curve. (a) A boost in research and development by computer companies produces more powerful and efficient computers and equipment. _ (b) Income falls in several countries that trade heavily with the U.S. (c) Prices fall in the economy. (d) After a budget surplus, Congress moves to cut personal income taxes.
Using supply-and-demand diagrams, show the effect of the following events on the market for solar panels....
Using supply-and-demand diagrams, show the effect of the following events on the market for solar panels. Do the following for each example: 1) Explicitly write which curve moves. 3) Explicitly write which direction it moves in. 4) Explicitly write what happens to equilibrium price. 5) Explicitly write what happens to equilibrium quantity. Note: Drawing the diagrams is not required for the exam, but doing so should still help you to answer the question. (a) (4 points) There is an increase...
1. Using supply-and-demand diagrams, show the effect of the following events on the market of printed...
1. Using supply-and-demand diagrams, show the effect of the following events on the market of printed textbooks. a. A continuous decrease in forests b. The price of electronic textbooks falls. c. Colleges require all students to buy printed textbooks d. New machines to produce printed textbook are invented
Using supply-and-demand diagrams, show the effect of the following events on the market for MRI Scans...
Using supply-and-demand diagrams, show the effect of the following events on the market for MRI Scans (not machines). Indicate the change in equilibrium price and quantity. (Hint: Determine whether Demand or Supply is affected in each case)(10 pts) The price of CT scans increases. Explain the relationship between MRI scans and CT scans. The technology to produce MRI machines improves causing costs to go down. Consumer income falls because of a recession. The number hospitals in areas decreases due to...
The following events shift either the supply or demand curve for American-made automobiles. Draw a set...
The following events shift either the supply or demand curve for American-made automobiles. Draw a set of market supply and demand curve that illustrates each of the following historical events: Serious strikes hit the auto industry during the 1930s. During World War II, producers of automobiles converted their factories to war production. In 1973, oil prices rose dramatically. Pick-up trucks, mini-vans, and recreation vehicles gained popularity in the 1980s, and many families bought such vehicles rather than automobiles.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT