Macroeconomics: What effect will each of the following have on the demand for small automobiles such as the Honda Civic or Ford Focus?A supply schedule or curve shows that, other thingsequal, the quantity of a good supplied varies directlywith its price.The supply curve shifts because of changes in(a) resource prices(b) technology(c) taxes or subsidies(d) prices of other goods(e) expectations of futureprices(f) the number of suppliers A change in supply is a shift of the supply curve; achange in quantity supplied is a movement from onepoint to another on a fixed supply curve.Questions:Consumers anticipate that the price of small autos will greatly come down in the near future.The price of gasoline substantially drops.

Answered: Consumers anticipate that the price of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Macroeconomics: What effect will each of the following have on the demand for small automobiles such as the Honda Civic or Ford Focus?

A supply schedule or curve shows that, other things
equal, the quantity of a good supplied varies directly
with its price.
The supply curve shifts because of changes in
- (a) resource prices
- (b) technology
- (c) taxes or subsidies
- (d) prices of other goods
- (e) expectations of future
  prices
- (f) the number of suppliers
A change in supply is a shift of the supply curve; a
change in quantity supplied is a movement from one
point to another on a fixed supply curve.

Questions:

Consumers anticipate that the price of small autos will greatly come down in the near future.
The price of gasoline substantially drops.

Expert Solution

Step 1

When the demand decreases, the demand curve shifts towards left and when demand increases the demand curve shift towards right. The intersection of supply and demand curve determines the point of equilibrium, where qunatity demanded is equal to quantity supplied.

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