The reason behind the rightward shift in the demand curve.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

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

If 17 Ps are needed and no on-hand inventory exists fot any of thr items, how many Cs will be needed?

Exercise 5Consider the demand and supply functions for the notebooks market.QD=10,000−100pQS=900pa. Make a table with the corresponding supply and demand schedule.b. Draw the corresponding graph.c. Is it possible to find the price and quantity of equilibrium with the graph method? d. Find the price and quantity of equilibrium by solving the system of equations.

1. Consider the market supply curve which passes through the intercept and from which the marketequilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000.a. Considering those two points, find the equation of the supply. b. Draw a graph for this equation. 2. Considering the previous supply line, determine if the following demand function corresponds to themarket demand equilibrium stated above. QD=.3000-2p.

Answer 2

Question

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

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!

Answer 3

Question

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

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!

Answer 4

Question

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

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!

Answer 5

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Answer 6

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Answer 7

Chapter P2, Problem 1KC

To determine

The reason behind the rightward shift in the demand curve.

Answer 8

Expert Solution & Answer

Answer to Problem 1KC

Option 'b' is correct.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Option (b):

When the price of the auto insurance falls, it leads to an increase in the demand for the autos. This is because the auto insurance is mandatory for taking the auto and when the insurance price decreases, it increases the real money balance and causes a rightward shift in the demand curve. This means option 'b' is correct.

Option (a):

When everything else remains the same, an increase in the price of a commodity will lead to a decrease in the demand for the same. Thus, when the price falls here, the demand will increase but will lead to a movement along the same demand curve and not a shift. It means that option 'a' is incorrect.

Option (c):

The fall in the consumer income decreases the real income of the consumer and as a result, the demand curve will shift inward, and it will be depicted by a leftward shift in the demand curve. This indicates that option 'c' is also incorrect.

Option (d):

The fall in the price of steel would decrease the production cost of autos. When the cost of production decreases, the price will decrease making an increase in demand that leads to a movement along the same demand curve. Since the change in the price of steel causes a movement along the same curve and not a shift, option 'd' is incorrect.

Answer 12

Economics Concept Introduction

Market: The market is the place where the buyers and sellers interact with each other and the exchange of goods and services takes place between the two at a mutually agreed price level. The demand is done by the consumers, whereas the supply is done by sellers.

Answer 13

Ch. P2 - Prob. 1KC Ch. P2 - Prob. 2KC Ch. P2 - Prob. 3KC Ch. P2 - Prob. 4KC Ch. P2 - Prob. 5KC Ch. P2 - Prob. 6KC Ch. P2 - Prob. 7KC Ch. P2 - Prob. 8KC

The reason behind the rightward shift in the demand curve.

The reason behind the rightward shift in the demand curve.

Answer to Problem 1KC

Explanation of Solution

Want to see more full solutions like this?

Chapter P2 Solutions