ACTIVITY 4
The market for beer is currently in equilibrium.
Now suppose the US increases the legal drinking age to 25. This has an effect on the consumption of beer. Below let me know if the demand curve or the supple curve will change. (Only 1 will change) Also let me know what happens to equilibrium price and equilibrium quantity.
Demand decreases (shifts to the left)
Equilibrium price decreases
Equilibrium quantity decreases
The market for crude oil is in equilibrium.
Now suppose the price of crude oil decreases. This has an effect on the production of gasoline. Below let me know if the demand curve or the supple curve will change. (Only 1 will change) Also let me know what happens to equilibrium price and equilibrium quantity.
Supply increases (shifts to the right)
Equilibrium price decreases
Equilibrium quantity increases
The market for apples is in equilibrium.
Now suppose the price of oranges has increased. Apples and oranges are considered substitutes in consumption. Below let me know if the demand curve or the supple curve will change. (Only 1 will change) Also let me know what happens to equilibrium price and equilibrium quantity.
Demand increases (shifts to the right)
Equilibrium price increases
Equilibrium quantity increases
The market for premium coffee is in equilibrium.
Now suppose there is an increase in taxes on premium coffee. This increase in taxes affects the production side. Below let me know if the demand curve or the supple curve will change. (Only 1 will change) Also let...