Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of hamburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of hamburgers? O If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the supply shift. O If the price decrease was small, then the supply shift in the market for hamburgers must have been larger than the demand shift. O If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the demand shift. O Whichever change occurred first must have been the primary cause of the change in the price of hamburgers.
Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of hamburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of hamburgers? O If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the supply shift. O If the price decrease was small, then the supply shift in the market for hamburgers must have been larger than the demand shift. O If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the demand shift. O Whichever change occurred first must have been the primary cause of the change in the price of hamburgers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I have completed the two supply and
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Transcribed Image Text:The second group of students attributes the decrease in the price of hamburgers to the decrease in the price of pizza at local pizza parlors.
On the following graph, adjust the supply and demand curves to illustrate the second group's explanation for the decrease in the price of hamburgers.
Supply
Demand
Supply
D2
QUANTITY (Hamburgers)
Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of hamburgers. Based on your analysis of
groups of studen
how would you figure out which of the possible causes was the dominant cause of the
the explanations offered by the tw
decrease in the price of hamburgers?
O If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the
supply shift.
O If the price decrease was small, then the supply shift in the market for hamburgers must have been larger than the demand shift.
O If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the
demand shift.
O Whichever change occurred first must have been the primary cause of the change in the price of hamburgers.
PRICE (Dollars per hamburger)
Transcribed Image Text:15. Another supply and demand puzzle
The market price of hamburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price
decrease. Some students suggest that the price decreased because the price of beef, an important ingredient for making hamburgers, has decreased.
Other students attribute the decrease in the price of hamburgers to a recent decrease in the price of pizza at local pizza parlors. Everyone agrees that
the decrease in the price of pizza was caused by a recent decrease in the price of marinara sauce, which is not generally used in making hamburgers.
Assume that burger joints and pizza parlors are entirely separate entities-that is, there aren't places that serve both hamburgers and pizza.
The first group of students thinks the decrease in the price of hamburgers is due to the fact that the price of beef, an important ingredient for making
hamburgers, has decreased.
On the following graph, adjust the supply and demand curves to illustrate the first group's explanation for the decrease in the price of hamburgers.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back
to its original position, just drag it a little farther.
S2
Demand
Supply
Demand
QUANTITY (Hamburgers)
PRICE (Dollars per hamburger)
Expert Solution
Step 1
The curve that depicts the quantities of goods and services being purchased at various levels of price by individuals is known as the demand curve.
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