Question a. Illustrate the impact on equilibrium price and quantity of the following: i. Market for laptops There has been increased access to wireless technology and laptops have a lighter weight. Laptops have also become easier and cheaper to produce as new technology has come online. ii. Market for pork Doctors warn that consumption of pork may lead to high cholesterol coupled with an increase in the price of pig feed. iii. Market for office spaces During the Covid 19 pandemic, there was an increase in the number of persons who worked from home. iv. Market for Alumina The government has decided to offer subsidies to local alumina producers to assist as they compete against foreigners. b. The equilibrium price of printers saw a large decrease in the past year, however the equilibrium quantity remained unchanged. Three individuals provided an explanation for the situation. Which explanation(s) could be correct? Explain. • Alex: Demand increased, but supply was totally inelastic. • Lance: Supply increased, but so did demand. • Ricardo: Supply decreased, but demand was totally inelastic C.The demand for pancakes is given by Qd = 40 – 5P and the supply is given by Qs = 10P – 20, where P = price What is the equilibrium price and equilibrium quantity? i. The price for iPhones in Barbados has increased significantly. Demand for the cellular device has also increased. This is contrary to the law of demand. Do you agree or disagree? Explain your answer. ii. Identify the flaw in this analysis: “If more Jamaicans become vegetarians, the demand for beef will fall. The decrease in the demand for beef will cause the price of beef to fall. The lower price, however, will then increase the demand. In the new equilibrium, Jamaicans might end up consuming more beef than they did initially.”
Question
a. Illustrate the impact on
i. Market for laptops
There has been increased access to wireless technology and laptops have
a lighter weight. Laptops have also become easier and cheaper to
produce as new technology has come online.
ii. Market for pork
Doctors warn that consumption of pork may lead to high cholesterol
coupled with an increase in the price of pig feed.
iii. Market for office spaces
During the Covid 19 pandemic, there was an increase in the number of
persons who worked from home.
iv. Market for Alumina
The government has decided to offer subsidies to local alumina
producers to assist as they compete against foreigners.
b. The equilibrium price of printers saw a large decrease in the past year, however
the
explanation for the situation. Which explanation(s) could be correct? Explain.
• Alex:
• Lance: Supply increased, but so did demand.
• Ricardo: Supply decreased, but demand was totally inelastic
C.The demand for pancakes is given by Qd = 40 – 5P and the supply is given by
Qs = 10P – 20, where P = price What is the equilibrium price and equilibrium
quantity?
i. The price for iPhones in Barbados has increased significantly. Demand for the
cellular device has also increased. This is contrary to the
you agree or disagree? Explain your answer.
ii. Identify the flaw in this analysis: “If more Jamaicans become vegetarians, the
demand for beef will fall. The decrease in the demand for beef will cause the
price of beef to fall. The lower price, however, will then increase the demand.
In the new equilibrium, Jamaicans might end up consuming more beef than
they did initially.”
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