Which of the following pairs of events would signal an ambiguous effect on the market price? (check all that apply) there is an increase in supply and an increase in the quantity demanded there is a decrease in demand and a decrease in supply there is a decrease in demand and a decrease in the quantity supplied there is an increase in demand and a decrease in supply
Which of the following pairs of events would signal an ambiguous effect on the market price? (check all that apply) there is an increase in supply and an increase in the quantity demanded there is a decrease in demand and a decrease in supply there is a decrease in demand and a decrease in the quantity supplied there is an increase in demand and a decrease in supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Which of the following pairs of events would signal an ambiguous effect on the market
there is an increase in supply and an increase in the quantity demanded
there is a decrease in demand and a decrease in supply
there is a decrease in demand and a decrease in the quantity supplied
there is an increase in demand and a decrease in supply
Expert Solution
Step 1: Define shift in demand.
The demand curve is the downward-sloping curve.
The supply curve is the upward-sloping curve.
The equilibrium is where the demand curve intersects the supply curve.
When there is an increase in demand, the demand curve shifts to the right.
When there is a decrease in demand, the demand curve shifts to the left.
When there is an increase in supply, the supply curve shifts to the right.
When there is a decrease in supply, the supply curve shifts to the left.
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