1. EXPLAIN EACH ONE IN DEPTH
2. Describe how each of the following will affect the demand for hybrid cars:
3. a. A rise in income (assuming that hybrid cars are a normal good)
4. b. Consumers expect prices of hybrid cars to fall in the future.
5. c. Price of gasoline rises.
6. d. Increased number of campaigns in favor of protecting the environment.
8. Describe how each of the following will affect the supply of personal computers:
9. a. A rise in wage rates
10. b. An increase in the number of sellers of computers
11. c. A tax placed on the production of computers
12. d. A subsidy for the production of computers
14. Refer to graph below to answer the following questions
15. a. Identify the areas that represent consumers' surplus at the equilibrium price of PE.
16. b. Identify the areas that represent consumers' surplus if there is a price ceiling of Pc.
17. c. Identify the areas that represent deadweight loss due to a price ceiling set at PC.
20. For each of the letters below, indicate if demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unitary elastic:
21. a. Price rises by 10 percent, and quantity demanded falls by 2 percent.
22. b. Price falls by 5 percent, and quantity demanded rises by 5 percent.
23. c. Price falls by 6 percent, and quantity demanded does not change.
24. d. Price rises by 2 percent and quantity demanded falls by 3 percent.
26. 5. Suppose the current price of gasoline at the pump is $4 per gallon and that 1 million gallons are sold per day. A politician proposes to add a $1 tax to the price of a gallon of gasoline. She says that the tax will generate $1 million in tax revenues per day. Explain the assumption that she is making.

Pic 1

S- P Pu 2 L PE 5 PC 6 DA