Question 1

There are three parts to this question

1.Explain the law of demand.

2.Why does a demand curve slope downward?

3.What are the determinants of demand, and what effect do they have?

Question 2

There are three parts to this question.

1.Explain the law of supply.

2.Why does the supply curve slope upward?

3.What are the determinants of supply, and explain their effect?

Question 3

What effect will each of the following have on the supply ofautotires?State whether there will in an increase or a decrease in the supply,and then explain why it will happen.

1. A technological advance in the methods of producing tires
2. A decline in the number of firms in the tire industry
3. An increase in the prices of rubber used in the production of tires