For each of the following events, determine whether the event cause  An increase in demand (a rightward shift)  A decrease in demand (a leftward shift)  A decrease in quantity demanded (a movement up along)  An increase in quantity demanded (a movement down along)

 

1. The government passes "Medicare for all" legislation which provide health care to everyone without co-pays, deductibles, or out-of-pocket expenses. a. What is the effect of this event on consumer purchases of private health insurance? b. What is the effect of this event on purchases of all other goods and services different from health insurance.

2. The price of gasoline rise. a. What is the effect of this event on consumer purchases of gasoline? b. What is the effect of this event on consumer purchases of large size vehicles which use large amounts of gasoline? c. What is the effect of this event on consumer purchases of electric vehicles?

3. "Both residential and non-residential construction increase". a. What is the effect of this event on purchases of construction materials? b. What is the effect of this event on hiring (demand for) construction workers?

4. The price of construction materials increase. What is the effect of this event on purchases of construction materials?

5. Consumer incomes decrease. a. What is the effect of this event on purchases of luxury cars such as BMW and Mercedes? b. What is the effect of this event on purchases of inferior goods such as canned food.

6. Wages increase (hint: wage is the price of labor). What is the effect of this event on hiring (demand for) workers?

7. When the economic situation makes it difficult to find a job, people use the extra time to improve their skills by enrolling in colleges and universities. Once the economy recovers and jobs become available, what would be the effect on enrollment in colleges and universities? That is, what would be the effect on demand for college courses?

8. Young people use laptops, cellphones and tablets instead of TV sets. a. How will this trend affect demand of TVs? b. How will this trend affect demand for DVD players?

9. Unlike their parents, who buy the classics (Bud, Coors, Miller) Millennials prefer craft beer. How will this trend affect demand for classic brands like Bud, Coors and Miller?

10. In a desperate attempt to regain the youth market, classic brands (Bud, Coors, Miller) drastically reduce their prices relative to the price of craft beers. How will this price change affect demand for classic brands (Bud, Coors and Miller)?

11. The percentage of 16-to-24-year-olds with a driver's license has plummeted since 1997 and is now below 70%. The young prefer to walk, ride bikes or scooters and use public transportation. a. How will this trend affect demand for cars? b. How will this trend affect demand for parking? c. How will this trend affect demand for public transportation? d. How would this trend affect demand for gasoline? e. How will this trend affect demand for ride sharing scooters and e-bikes?

12. After growing up in the Great Recession, millennials would rather put their money in a sock drawer than on Wall Street. How will this trend affect demand for stocks and bonds?

13. By law if you do not purchase health insurance coverage, you will have to pay a penalty equal to 2.5 percent of your yearly household income or $695 per person, whichever is greater. How would this new law affect demand for health insurance?

14. The uninsured rely on extremely expensive emergency services when they get sick. In order to cover for this exorbitant cost, insurance companies must charge higher policy premiums to those who purchase health insurance. How will this higher price affect

15. The Government increased interest rates making it more expensive for consumers to get a loan. a. How will this trend affect demand for loans? (Hint: the interest rate is the price of money) b. How will this trend affect demand for new homes? (Hint: Most new homes are purchased on credit) 16. A new government subsidy (money paid to consumers by the government) reduces the price of day care services. How will this trend affect purchases for day care services?

17. Los Angeles imposes a ban on e-cigarettes from public spaces. How will this ban affect purchases of e-cigarettes in Los Angeles?

18. Due to increased competition from foreign brands, the price of e-cigarettes drops. How will this affect purchases of e-cigarettes?

19. The number of vaping deaths have climbed over 50 as the outbreak of lung injury cases have topped 2,500 nationwide, according to the Centers for Disease Control and Prevention. How will this affect purchases of e-cigarettes?

20. Consumers consider tablets and laptops substitute goods. The price of tablets fall. a. What is the effect of this price change on purchases of laptops? b. What is the effect of this price change on purchases of tablets?