Market Supply And Demand Schedules For Bicycles Money Worksheet With Answer Key Page 3
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42.
Each of the events listed below has an impact on the market for
bicycles. For each event, which curve is affected (supply or demand for
bicycles), what direction is it shifted, and what is the resulting impact on
equilibrium price and quantity of bicycles?
a.
The price of cars increases.
Answer:
demand, shifts right, equilibrium price and quantity rise
b.
Consumers' incomes decrease, if bicycles are a normal good.
Answer:
demand, shifts left, equilibrium price and quantity fall
c.
The price of steel used to make bicycle frames increases.
Answer:
supply, shifts left, equilibrium price rises, equilibrium quantity falls
d.
An environmental movement shifts tastes toward bicycling.
Answer:
demand, shifts right, equilibrium price and quantity rise
e.
Consumers expect the price of bicycles to fall in the future.
Answer:
demand, shifts left, equilibrium price and quantity fall
f.
A technological advance in the manufacture of bicycles occurs.
Answer:
supply, shifts right, equilibrium price falls, equilibrium quantity rises
g.
The price of bicycle helmets and shoes is reduced.
Practice Questions to accompany Mankiw & Taylor: Economics
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