Essentials Of Economics, Loose-leaf Version
Essentials Of Economics, Loose-leaf Version
8th Edition
ISBN: 9781337096898
Author: N. Gregory Mankiw
Publisher: South-Western College Pub
Question
Book Icon
Chapter 4, Problem 1CQQ
To determine

The determinants of the demand curve.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

A change in price of hamburgers leads to a movement along the demand curve and not a shift of the demand curve because price is measured on the vertical axis of a demand curve.  Thus, option ‘b’ is correct.

Option (a):

Hot dogs can be considered as substitutes of hamburgers. A change in the price of a substitute good shifts the demand curve of a good. Thus, a change in price of hot dogs shifts the demand curve of hamburgers. So, option ‘a’ is incorrect.

Option (c):

Hamburger buns can be considered as complementary goods of hamburgers. A change in the price of a complementary good shifts the demand curve of a good. Thus, a change in the price of hamburger buns shifts the demand curve of a hamburger. So, option ‘c’ is incorrect.

Option (d):

A change in the income of a consumer of a good shifts the demand curve of that good. Thus, a change in the income of hamburger consumers shifts the demand curve of hamburger. So, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Complementary good: It is a good with a negative cross elasticity of demand, that is, a good whose demand is increased when the price of another good is decreased.

Substitute good: It is a good with a positive cross elasticity of demand, that is, a good whose demand is decreased when the price of another good is decreased.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Asap please
Tasks Exercise 1 Assess the following functions: 1. f(x)= x2+6x+2 2.f '(x)=10x-2x2+5 a. Find the stationary points. (5 marks) b. Determine whether the stationary point is a maximum or minimum. (5 marks) c. Draw the corresponding curves (5 marks)
Problem 2: The sales data over the last 10 years for the Acme Hardware Store are as follows: 2003 $230,000 2008 $526,000 2004 276,000 2009 605,000 2005 328,000 2010 690,000 2006 388,000 2011 779,000 2007 453,000 2012 873,000 1. Calculate the compound growth rate for the period of 2003 to 2012. 2. Based on your answer to part a, forecast sales for both 2013 and 2014. 3. Now calculate the compound growth rate for the period of 2007 to 2012. 1. Based on your answer to part e, forecast sales for both 2013 and 2014. 5. What is the major reason for the differences in your answers to parts b and d? If you were to make your own projections, what would you forecast? (Drawing a graph is very helpful.)
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning