Economics Economics

Economics

Economics

  1. The data provided indicate an upward sloping. Any increase in the price causes an increase in the quantity demanded. When the products quantity increases as the price rises, then the curve created is identified as an upward sloping demand curve. The curve is mainly caused by conspicuous consumption where consumers purchase luxury items due to the status associated with them. Consumers may have a higher demand for expensive items due to the belief that high prices confer the status of these goods (Staveren, 2015).

2:bin this situation the balls signed by the superstar are taken asconspicuous goods, this means that an raise in the price will causean increase in the quantity demanded.

3:a

Demanddecreases price increases

3.bDue to decreased demand for ethanol the supply of tortillas increasedwhich makes the price to decrease (Staveren, 2015).

CEPA agreement would cause an increase in demand for ethanolAlternatively, this would lead to a decreased supply of tortillasthat would hence make the price rise.

4:

4b

Fromthe graphs if the price for internet fall, then the quantity ofinternet ads will increase. Additionally a decrease in internetprices will cause a shift in quantity where it will increase.

5rent controls helps in regulating the prices and the demand forrental houses in the city

Bdue to regulated relatively low prices of rental houses the demandincreases, which causes the supply to be minimal hence causing acontroversy. In a situation, prices are regulated due to increaseddemand the rise of black market arises where rents are sold at a highprice in a hidden market to satisfy the demand (Lengwiler, 2004).

C. Due to rent control the rise in the black market in prevalent incontrolled rent as compared to free rental.

6

6B

6c.

Inan over decreased demand for the sodas due to high prices the wherethe price goes beyond ten, then the company should shift back to caresugar

E:the most significant unintended economic consequences of a decreasein supply of sodas are decreasing in prices

f.Price reduction will cause an increased demand, hence buying moresodas which are a short term issue to cater for long-term issue, itis important to reduce the production fee, hence making more profit(Endres, &amp Radke, 2012).

References

Endres,A., &amp Radke, V. (2012). Economicsfor environmental studies: A strategic guide to micro- andmacroeconomics.Berlin: Springer.

Lengwiler,Y. (2004). Microfoundationsof financial economics: An introduction to general equilibrium assetpricing.Princeton, NJ: Princeton University Press.

Staveren,I. . (2015). Economicsafter the crisis: An introduction to economics from a pluralist andglobal perspective.