Please can somebody help me with this!!! GE273: Week 2 Demand and Supply Changes
ID: 1176869 • Letter: P
Question
Please can somebody help me with this!!!
GE273: Week 2 Demand and Supply Changes
Page 1
For each event given below, respond to the following points using the determinants of demand and supply:
A. Determine whether demand or supply changes or if the event instead causes a change in quantity demanded or quantity supplied.
B. State whether the change is an increase or decrease.
C. List the determinant that led you to that conclusion.
Events
1. The price of oil increases because OPEC reduces oil production.
2. The tax on gasoline consumption increases.
3. Firms start producing more fuel efficient vehicles and produce fewer vehicles that use fuel inefficiently.
4. Summer arrives and more people choose to take vacations.
5. The price of gasoline increases.
6. The price of ethanol, a complement good, increases.
7. There is a large oil spill in the Gulf of Mexico.
8. Incomes fall because a recession begins and gasoline is a normal good.
9. Consumers desire more electric powered vehicles instead of gasoline powered vehicles.
10. A new production method allows for twice as much gasoline to be refined per day.
Explanation / Answer
A CHANGE IN THE QUANTITY DEMANDED OR QUANTITY SUPPLIED IS CAUSED BY A CHANGE IN THE OWN PRICE OF THE COMMODITY. AN INCREASE OR DECREASE IN THE DEMAND OR SUPPLY OF A COMMODITY IS CAUSED BY A CHANGE IN DETERMINANT OF DEMAND OR SUPPLY OTHER THAN ITS OWN PRICE
ANS 1 HERE THE SUPPLY OF OIL HAS DECREASED BECAUSE THIS IS DUE TO A CHANGE IN DETERMINANT OFSUPPLY OTHER THAN ITS OWN PRICE ( REDUCTION IN OIL PRODUCTION) ANS2- The tax on gasoline consumption increases. THIS WILL RESULT IN THE DECREASE IN THE CONSUMPTION OF GASOLINE BECAUSE THIS IS DUE TO A CHANGE IN DETERMINANT OF DEMAND OTHER THAN ITS OWN PRICE (TAX ON GASOLINE)
ANS3- THIS WILL RESULT IN THE DECREASE IN THE DEMAND FOR FUEL BECAUSE THIS IS DUE TO A CHANGE IN DETERMINANT OF DEMAND OTHER THAN ITS OWN PRICE ( IMPROVEMENT IN TECHNOLOGY) ANS4- DEMAND HAS INCREASED BECAUSE OF SEASON AND NOT BECAUSE OF ITS OWN PRICE. ANS5- THIS WILL RESULT IN THE REDUCTION IN THE QUANTITY DEMANDED ( A CHANGE IN THE QUANTITY DEMANDED IS CAUSED BY A CHANGE IN THE OWN PRICE OF THE COMMODITY.) ANS6- THIS WILL RESULT IN THE DECREASE IN DEMAND (CHANGE IS DUE TO THE PRICE OF COMPLEMENTRY GOOD ) ANS7- SUPPLY WILL DECREASE (A CHANGE IN DETERMINANT OF SUPPLY OTHER THAN ITS OWN PRICE) ANS8- DEMAND DECREASE ( A CHANGE IN DETERMINANT OF DEMAND OTHER THAN ITS OWN PRICE) ANS9- DEMAND DECREASE ( A CHANGE IN DETERMINANT OF DEMAND OTHER THAN ITS OWN PRICE)
ANS 10 - INCREASE IN SUPPLY (A CHANGE IN DETERMINANT OF SUPPLY OTHER THAN ITS OWN PRICE)