3. If all other factors remain the same, what happensto the demand curve for coffee if there is:(a) an increase in the price of tea,(b) a decrease in family income,(c) an increase in the price of coffee?In answering these questions draw and carefully labela set of axes. On the horizontal axis of your graph,show the quantity of coffee. On the vertical axis showthe price per cup of coffee. Since you do not havespecific data on prices and quantities demanded, justindicate prices with a P and Quantity with a Q. Focuson the general shape and position of the curves beforeand after events occur. Draw new curves to show whathappens in each of the circumstances given, ifnecessary.3. If all other factors are unchanged, whathappens to the supply curve for coffee if thereis:(a) an increase in wages paid to coffee storeclerks,(b) an increase in the price of coffee, or(c) an increase in the number of coffee stores?In answering these questions draw graphs, asnecessary, using the instructions above, thatshows what happens to the supply curve ineach circumstance.

A demand (D) curve is a graphical depiction of the correlation between the quantity (Q) of a product…

3. If all other factors remain the same, what happens to the demand curve for coffee if there is: (a) an increase in the price of tea, (b) a decrease in family income, (c) an increase in the price of coffee?

3. If all other factors remain the same, what happens to the demand curve for coffee if there is: (a) an increase in the price of tea, (b) a decrease in family income, (c) an increase in the price of coffee?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

3. If all other factors remain the same, what happens
to the demand curve for coffee if there is:
(a) an increase in the price of tea,
(b) a decrease in family income,
(c) an increase in the price of coffee?
In answering these questions draw and carefully label
a set of axes. On the horizontal axis of your graph,
show the quantity of coffee. On the vertical axis show
the price per cup of coffee. Since you do not have
specific data on prices and quantities demanded, just
indicate prices with a P and Quantity with a Q. Focus
on the general shape and position of the curves before
and after events occur. Draw new curves to show what
happens in each of the circumstances given, if
necessary.
3. If all other factors are unchanged, what
happens to the supply curve for coffee if there
is:
(a) an increase in wages paid to coffee store
clerks,
(b) an increase in the price of coffee, or
(c) an increase in the number of coffee stores?
In answering these questions draw graphs, as
necessary, using the instructions above, that
shows what happens to the supply curve in
each circumstance.

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