Question
1.) Complete the following table by selecting the term that matches each definition. Definition Quantity Demanded Demand Curve Demand Schedule Law of Demand A table
1.)
Complete the following table by selecting the term that matches each definition.
| Definition | Quantity Demanded | Demand Curve | Demand Schedule | Law of Demand | |
|---|---|---|---|---|---|
| A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices | |||||
| The claim that, with other things being equal, the quantity demanded of a good falls when the price of that good rises | |||||
| The amount of a good that buyers are willing and able to purchase at a given price | |||||
| A graphical object showing the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices |
Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology.Your boss would like your help on a marketing research project she is conducting on the relationship between the price of soda and the quantity of soda demanded. She hands you the following document:
| Price of Soda | Quantity of Soda Demanded |
|---|---|
| (Dollars per can) | (Billions of cans) |
| 0.50 | 2,000 |
| 0.75 | 1,500 |
| 1.00 | 1,000 |
| 1.25 | 750 |
Your task is to take this demand schedule/demand curve/law of demand/quantity of soda demanded and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the demand schedule/demand curve/law of demand/quantity of soda demanded .
2.)
Consider the market for gas-powered small cars. Assume gas-powered small cars are a normal good.
For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected by this event because it creates only a supply change, select the "None" option under the "Demand Determinant" column. Similarly, if supply is unaffected by this event because it creates only a demand change, select the "None" option under the "Supply Determinant" column.
| Event | Demand Determinant | Supply Determinant |
|---|---|---|
| People decide to have more children. | income/price of substitute or complement/tastes/expectationsumber of buyersone | input prices/technology/expectationsumber of sellersone |
| The price of electric small cars falls. | income/price of substitute or complement/tastes/expectationsumber of buyersone | input prices/technology/expectationsumber of sellersone |
| The discovery of a new source of iron ore lowers steel prices. | income/price of substitute or complement/tastes/expectationsumber of buyersone | input prices/technology/expectationsumber of sellersone |
| An economic recession lowers people's wealth. | income/price of substitute or complement/tastes/expectationsumber of buyersone | input prices/technology/expectationsumber of sellersone |
| A number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. | income/price of substitute or complement/tastes/expectationsumber of buyersone | input prices/technology/expectationsumber of sellersone |
Show the effect of the following event on the market for gas-powered small cars: People decide to have more children.
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Macroeconomics Principles, Problems, & Policies
Authors: Campbell McConnell, Stanley Brue, Sean Flynn
20th Edition
0077660773, 9780077660772
