The market price of hamburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several burger joints in the area have recently gone out of business. Other students attribute the increase in the price of hamburgers to a recent decrease in the price of french fries. Everyone agrees that the decrease in the price of french fries was caused by a recent decrease in the price of potatoes, which are not generally used in making hamburgers. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of hamburgers. The second group of students attributes the increase in the price of hamburgers to the decrease in the price of french fries. On the following graph, adjust the supply and demand curves to illustrate the second group's explanation for the increase in the price of hamburgers. Suppose that both of the events you have just analyzed are partly responsible for the increase 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 increase in the price of hamburgers? CHOICE 1 - If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the supply shift. CHOICE 2 -If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the demand shift. CHOICE 3 -Whichever change occurred first must have been the primary cause of the change in the price of hamburgers. CHOICE 4 - If the price increase was small, then the supply shift in the market for hamburgers must have been larger than the demand shift.

The market price of hamburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several burger joints in the area have recently gone out of business. Other students attribute the increase in the price of hamburgers to a recent decrease in the price of french fries. Everyone agrees that the decrease in the price of french fries was caused by a recent decrease in the price of potatoes, which are not generally used in making hamburgers. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of hamburgers. The second group of students attributes the increase in the price of hamburgers to the decrease in the price of french fries. On the following graph, adjust the supply and demand curves to illustrate the second group's explanation for the increase in the price of hamburgers. Suppose that both of the events you have just analyzed are partly responsible for the increase 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 increase in the price of hamburgers? CHOICE 1 - If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the supply shift. CHOICE 2 -If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the demand shift. CHOICE 3 -Whichever change occurred first must have been the primary cause of the change in the price of hamburgers. CHOICE 4 - If the price increase was small, then the supply shift in the market for hamburgers must have been larger than the demand shift.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Everyone agrees that the decrease in the price of french fries was caused by a recent decrease in the price of potatoes, which are not generally used in making hamburgers.

The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business.

On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of hamburgers.

The second group of students attributes the increase in the price of hamburgers to the decrease in the price of french fries.

On the following graph, adjust the supply and demand curves to illustrate the second group's explanation for the increase in the price of hamburgers.

Suppose that both of the events you have just analyzed are partly responsible for the increase 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 increase in the price of hamburgers?

CHOICE 1 - If the equilibrium quantity of hamburgers decreases, then the demand shift in the market for hamburgers must have been larger than the supply shift.

CHOICE 2 -If the equilibrium quantity of hamburgers decreases, then the supply shift in the market for hamburgers must have been larger than the demand shift.

CHOICE 3 -Whichever change occurred first must have been the primary cause of the change in the price of hamburgers.

CHOICE 4 - If the price increase was small, then the supply shift in the market for hamburgers must have been larger than the demand shift.

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