SEE BLACKBOARD

In Class Questions

What effect should each of the following have on the demand for portable CD-ROM players? What is the reasoning?

a. Development of improved, low priced DVD players that compete with the CD-Rom players.

b. An increase in population.

c. An increase in income.

d. An increase in the number and quality of CD-ROM music.

e. Consumer expectations of a substantial increase in the price of CD-ROM players.

 

What effect will each of the following have upon the supply of television sets? What is the reasoning?

a. An increase in the price of electronic equipment used in producing television sets.

b. A decline in the number of firms producing television sets.

c. A new tariff on imported television sets

d. New inexpensive television satellite dishes, which make televisions more popular among consumers.

 

Given the products below and the events that affect them, indicate what will happen to supply, demand, equilibrium quantity and equilibrium price. What determinant caused the demand and supply curve to shift.

a. Calculator. Schools require students to buy calculators for class; improved productivity shortens the time necessary to produce calculators.

b. Gasoline. Oil production decreases due to voluntary OPEC cutbacks; due to concern over travel- car travel is favored including the use of large "safe" cars and motor homes.

c. New homes. Economy slips into a recession; productivity of construction workers increase.

d. Tobacco- Government cuts subsidy to tobacco farmers; individuals quit smoking.