I. Consider the market for pizza in downtown Hartford. Draw five charts showing
ID: 1135131 • Letter: I
Question
I. Consider the market for pizza in downtown Hartford. Draw five charts showing the supply demand, equilibrium quantity and equilibrium price clearly on the axes. Be sure to label all axes and curves. (Hand drawn charts are fine. The charts do not need to have numbers.) Now draw the shift of the supply demand or supply curve for izza due to the following events. Be sure to make clear which line is the original and which is the after shift line. Show the new equilibrium quantit (Suggestion: use a dotted line for the after shift lines.) (20 points) a·The price of burritos increases. b. Income falls in town. Assume that pizza is a normal good for most people. c. Income falls in town. Assume that pizza is an inferior good for most people. d. The price of bread flour (a key ingredient in pizza crust) rises due to a drought in the midwest U.s e. Every pizza restaurant in New Haven decides to open an additional store in downtown Hartford. The next five questions are multiple choice, pick the one best best answer. (25 points) 2. The A) B) C) D) apples will decrease when apple prices rise. demand for quantity demanded of supply of equilibrium of 3. Which of the following best exemplifies the law of demand? A) As income taxes rise, fewer new cars are purchased. B) As the price of corn rises, more acres of corn are planted. C) As D) As the population rises, more electricity is consumed. the price of a car rental rises, fewer cars are rented. 4. An increase in supply is caused by: an increase in input prices. a decrease in the number of sellers in the market. suppliers' expectations of higher prices in the future. an advancement in the technology for producing the good. A) B) C) ) 5. If the wage rate of steelworkers falls and the price of aluminum falls, then the a. equilibrium price and quantity of steel will rise. b. equilibrium price and quantity of steel will fall. c. equilibrium price of steel will rise; quantity may rise or fall. d. equilibrium price of steel will fall; quantity may rise or fall. e. equilibrium quantity of steel will fall: price may rise or fall.Explanation / Answer
Ans 2)
When Price rises Quantity demanded for that good decreases and vice versa hence in our quantity of demanded apple should decrease when Price rise for apples
Option B is correct response
Asn 3)
Option C is correct response as Rental Price increases it would decrease the demand for the same
Ans 4)
Option C is correct becuase supply curve is direct relationship between Price and Quantity hence if expectation of price to increase in future exists it would increase the demand for the same goods
Ans 5)
In such case equilibrium price for steel will fall but quantity rise or fall will depend on the slope of demand curve
Hence option D is correct response