In the following scenarios, you will be given a product and an event. Determine If there will be an increase OR decrease in either the supply OR demand, what happens to the price of the product, and what happens
In the following scenarios, you will be given a product and an event. Determine If there will be an increase OR decrease in either the supply OR demand, what happens to the price of the product, and what happens to the quantity bought and sold. The first two are answered for you as examples.
EXAMPLE 1.
Oil. New oil fields are discovered by new companies in Canada
EX 1 ANSWER Supply increases, price decreases, quantities increase
EXAMPLE 2
Penguin merchandise. The Penguins play well and contend for a playoff spot.
EX 2 ANSWER Demand increases, price increases, quantities decrease
1. Yankees tickets. The Yankees built a new stadium that has 10,000 fewer seats.
2. Spam (Inferior good) . People’s incomes increase.
3. Foreign cars. The government places an excise tax on all foreign cars
produced in the U.S.
4. Jelly. The price of peanut butter increases.
5. Chickens. The price of chicken feed decreases.
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