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Consider the market for minivans. For each of the events listed here, identify which of
Chapter 4, Problem Problems and Applications 4.3(choose chapter or problem)
Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans. a. People decide to have more children. b. A strike by steelworkers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of sports utility vehicles rises. e. A stock-market crash lowers peoples wealth.
Questions & Answers
QUESTION:
Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans. a. People decide to have more children. b. A strike by steelworkers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of sports utility vehicles rises. e. A stock-market crash lowers peoples wealth.
ANSWER:Step 1 of 6
The demand is affected due to population level, income level, the price of related products, taste, preference, future expectations, etc. The supply is affected due to the technology of production, the productivity of the inputs, price of the inputs, taxes, subsidies, competition, future expectations, etc.