US Beef US Beef Question/Scenario three: Market: Beef Event: Chinese incomes inc
ID: 1169851 • Letter: U
Question
US Beef
US Beef Question/Scenario three:
Market: Beef
Event: Chinese incomes increase.
ix) What happens to the demand for beef?
x) What happens to the supply of beef?
xi) What happens to the equilibrium price of beef?
xii) What happens to the equilibrium quantity of beef?
Wood Burning Stoves
Question/Scenario four:
Market: wood burning stoves
Event: Price of heating oil doubles
xiii) What happens to the demand for wood burning stoves?
xiv) What happens to the supply of wood burning stoves?
xv) What happens to the equilibrium price of wood burning stoves?
xvi) What happens to the equilibrium quantity of wood burning stoves?
Apartments
Question/Scenario five:
Market: apartments
Event: Some apartment building are turned into condominiums AND home/house prices are falling.
xvii) What happens to the demand for apartments?
xviii) What happens to the supply of apartments?
xix) What happens to the equilibrium price of apartments?
xx) What happens to the equilibrium quantity of apartments?
Price PO Qty 0Explanation / Answer
Market: Beef
Event: Chinese incomes increase.
ix) What happens to the demand for beef?
-> Increase
x) What happens to the supply of beef?
->Increase demand leads to increase the price, causing an increase in supply. The supply curve will shift towards the right.
xi) What happens to the equilibrium price of beef?
-> The equilibrium price will increase, since both the demand and supply increase.
xii) What happens to the equilibrium quantity of beef?
-> The equilibrium quantity will increase, since both the demand and supply increase.
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Market: wood burning stoves
Event: Price of heating oil doubles
xiii) What happens to the demand for wood burning stoves?
Since the wood burning stove and heating oil are substitute goods, Increase in the price of heating oil will lead to an increase the demand of wood burning stoves. Demand curve will shift towards right.
xiv) What happens to the supply of wood burning stoves?
Increase demand leads to increase price of wood burning stoves, causing increase in supply. The supply curve will shift towards right.
xv) What happens to the equilibrium price of wood burning stoves?
The equilibrium price will increase, since both the demand and supply increase.
xvi) What happens to the equilibrium quantity of wood burning stoves?
The equilibrium quantity will increase, since both the demand and supply increase.
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