a.DEMAND:For each of the following cases, state how the demand for isuzu crosswind behaves i.e. whether there is an increase or decrease in demand or quantity demanded.

i.The price of gasoline rises because of a shortage in the world petroleum market.

ii.The lower priced "Mitsubishi Adventure" enters the car market.

iii.The country is hit by a recession, causing a fall in real incomes.

iv.The government imposes a 10 percent import levy on all imported car parts.

v.A lower rate of fatalities in accidents involving Isuzu crosswind is observed.

b.SUPPLY: Indicate whether a movement upward or downward along the supply curve, or a shift leftward or rightward of the supply curve of mangoes occurs for the following cases.

i.The surge in export demand raises prices

ii.The government imposes a price ceiling on mangoes to appease consumers who have not enough fruits last year.

iii.A new variety is developed which doubles the output per tree

iv.The current crop of mangoes is infested by fruit flies

v.The price of pesticides against fruit flies increases due to the 10 percent import levy.

c.Describe what will happen to equilibrium price and quantity of each of the commodities given the corresponding hypothetical situations

i.Coffee: the Philippine Medical Association announces that caffeine in coffee causes heart attack.

ii.National Bookstore's Books: Management engages in a one month cut-price book sale.

iii.Rice: Government imports rice from Thailand

iv.Pork: Foot and mouth disease (FMD) hits thousands of pigs resulting in a very high mortality rate.

v.Cigarettes: Taxes on cigarettes are increased from P2 to P3 per pack

Practice Questions

. True or false.Write "TRUE" if the statement is correct and "FALSE" if otherwise.

1.

The demand for a product is the quantity of good that the buyers are willing to buy at a certain price.

2.

The demand function shows how the quantity demanded of a good is dependent on its determinants.

3.

The demand curve is upward-sloping to the right.

4.

A coefficient of income elasticity shows us how elastic demand is.

5.

A positive cross price elasticity implies that goods are complementary.

6.

Inferior goods are purchased more at higher income levels.

7.

The more substitutes a good have the more inelastic in demand it becomes.

8.

The more important a good is to a consumer the more inelastic in demand it becomes.

9.

Normal goods are goods that gain importance as income increases.

10.

Complementary goods are used together.

II. Indicate what happens to the demand curve for mangoes (A. shift to the left, B. shift to the right, C. no effect) given the following situation

_____

1.

The price of pineapple, a substitute, good increases.

_____

2.

The quantity demanded decreases.

_____

3.

There is an increase in the export for Philippines mangoes

_____

4.

Typhoon caused damaged to mangoes decreasing the supply for mangoes.

_____

5.

More people prefer mangoes to pineapples

_____

6.

The price of mangoes increases

_____

7.

It is the season for mangoes

_____

8.

Incoa.DEMAND:For each of the following cases, state how the demand for isuzu crosswind behaves i.e. whether there is an increase or decrease in demand or quantity demanded.

i.The price of gasoline rises because of a shortage in the world petroleum market.

ii.The lower priced "Mitsubishi Adventure" enters the car market.

iii.The country is hit by a recession, causing a fall in real incomes.

iv.The government imposes a 10 percent import levy on all imported car parts.

v.A lower rate of fatalities in accidents involving Isuzu crosswind is observed.

b.SUPPLY: Indicate whether a movement upward or downward along the supply curve, or a shift leftward or rightward of the supply curve of mangoes occurs for the following cases.

i.The surge in export demand raises prices

ii.The government imposes a price ceiling on mangoes to appease consumers who have not enough fruits last year.

iii.A new variety is developed which doubles the output per tree

iv.The current crop of mangoes is infested by fruit flies

v.The price of pesticides against fruit flies increases due to the 10 percent import levy.

c.Describe what will happen to equilibrium price and quantity of each of the commodities given the corresponding hypothetical situations

i.Coffee: the Philippine Medical Association announces that caffeine in coffee causes heart attack.

ii.National Bookstore's Books: Management engages in a one month cut-price book sale.

iii.Rice: Government imports rice from Thailand

iv.Pork: Foot and mouth disease (FMD) hits thousands of pigs resulting in a very high mortality rate.

v.Cigarettes: Taxes on cigarettes are increased from P2 to P3 per pack

Practice Questions

. True or false.Write "TRUE" if the statement is correct and "FALSE" if otherwise.

1.

The demand for a product is the quantity of good that the buyers are willing to buy at a certain price.

2.

The demand function shows how the quantity demanded of a good is dependent on its determinants.

3.

The demand curve is upward-sloping to the right.

4.

A coefficient of income elasticity shows us how elastic demand is.

5.

A positive cross price elasticity implies that goods are complementary.

6.

Inferior goods are purchased more at higher income levels.

7.

The more substitutes a good have the more inelastic in demand it becomes.

8.

The more important a good is to a consumer the more inelastic in demand it becomes.

9.

Normal goods are goods that gain importance as income increases.

10.

Complementary goods are used together.

II. Indicate what happens to the demand curve for mangoes (A. shift to the left, B. shift to the right, C. no effect) given the following situation

_____

1.

The price of pineapple, a substitute, good increases.

_____

2.

The quantity demanded decreases.

_____

3.

There is an increase in the export for Philippines mangoes

_____

4.

Typhoon caused damaged to mangoes decreasing the supply for mangoes.

_____

5.

More people prefer mangoes to pineapples

_____

6.

The price of mangoes increases

_____

7.

It is the season for mangoes

_____

8.

Income increased

_____

9.

New technology increased mango production

_____

10.

Cost of production decreased

me increased

_____

9.

New technology increased mango production

_____

10.

Cost of production decreased