Economics Grad Level

FratBro23
Category:
Economics
Price: $5 USD

Question description

1. List the determinants of demand for consumer goods and explain, one by one, how changes in each of them will cause equilibrium price and quantity to change. In each case provide an example and a graph.

2. List the determinants of supply for consumer goods and explain, one by one, how changes in each of them will cause equilibrium price and quantity to change. In each case provide an example and a graph.

3. Use the 3-step method of analysis to analyze each of the following events. Include a fully labeled demand and supply diagram as well as a verbal explanation to explain your answers:

(a) The government prohibits the importation of sugar. What happens in the domestic market for sugar?
(b) Underground mining of beryllium is banned to prevent ground water contamination. As a result, beryllium producers must use more costly methods of mining. What happens in the market for beryllium?
(c) The world market price of aluminum falls. What happens in the domestic market for steel (a substitute)?
(d) The price of cable TV service decreases. What happens in the market for television sets (a complementary good)?

4. Use the theory of demand and supply to explain the errors of reasoning in this paragraph: An increase in supply will cause price to fall, which will cause an increase in demand, which will cause an increase in price. Therefore, there will be no change in price. The fall in price caused by the increase in supply will be matched by the rise in price caused by the increase in demand.

5. A common analytical definition of an asset is that it is "a claim on an uncertain future income stream". Use this definition to clarify the similarities and differences between corporate stocks and corporate coupon bonds. Pay particular attention to the difference between the nature of their associated income streams and the difference between their associated risks.


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(Top Tutor) Daniel C.
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