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Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer a. Demonstrate what happens to the firm's weekly quantity demanded if there is a negative demand shock. Assume prices are fixed. Instructions: Use the tool provided, 'S Fixed Prices', to draw the supply curve when prices are fixed. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Computer Market

Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer a. Demonstrate what happens to the firm's weekly quantity demanded if there is a negative demand shock. Assume prices are fixed. Instructions: Use the tool provided, 'S Fixed Prices', to draw the supply curve when prices are fixed. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Computer Market

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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es Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer. a. Demonstrate what happens to the firm's weekly quantity demanded if there is a negative demand shock. Assume prices are fixed. Instructions: Use the tool provided, 'S Fixed Prices', to draw the supply curve when prices are fixed. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Price $1,200 Computer Market 900 Computers per week Demand Tools S Fixed Prices D Negative Sh b. Generalizing from the computer market specifically to the economy as a whole, what will happen when this negative demand shock occurs? O Real GDP will decrease, prices will stay the same, and unemployment will increase. O Real GDP will stay the same, prices will decrease, and unemployment will increase. O Real GDP will stay the same, prices will decrease, and unemployment will stay the same. Real GDP will Increase, prices will increase, and unemployment will decrease.
Transcribed Image Text:es Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer. a. Demonstrate what happens to the firm's weekly quantity demanded if there is a negative demand shock. Assume prices are fixed. Instructions: Use the tool provided, 'S Fixed Prices', to draw the supply curve when prices are fixed. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Price $1,200 Computer Market 900 Computers per week Demand Tools S Fixed Prices D Negative Sh b. Generalizing from the computer market specifically to the economy as a whole, what will happen when this negative demand shock occurs? O Real GDP will decrease, prices will stay the same, and unemployment will increase. O Real GDP will stay the same, prices will decrease, and unemployment will increase. O Real GDP will stay the same, prices will decrease, and unemployment will stay the same. Real GDP will Increase, prices will increase, and unemployment will decrease.
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