Principles of Macroeconomics
Principles of Macroeconomics
Coursework
Rodoula Makri
ECON101-EN
Question 1:
a) Price of substitute good falls
- As seen on the diagram above when price of substitute product A rise, then demand for substitute product B rises accordingly. Positive relationship between the two. Shift to the right.
b) Taste shifts away from the good
- Whe the taste shifts away from the good it becomes less desirable, making its demand for it decrease. Shift to the left.
c) Price of complimentary good falls
- When the price of a complementary good falls that demand for the product as well as its complementary go up. Shift to the right.
d) Good become more expensive
- When a good becomes more expensive then the demand for it will decrease. Shift to the left.
Question 2:
a) Cost of production for a good falls
- When the cost of production become cheaper then supply goes up. Shift to the right.
b) Alliterative products become more profitable
- When alternative products become more profitable then suppliers stop using the less profitable products. Shift to the left.
c) Price of good rises
- When the price of a good rises the supply rises with it. Shift to the right.
d) Firms anticipate that the price of a good will fall
- If firms anticipate the price of a product will fall in the near future, they may choose to supply more of the product now.
Question 3:
a) People consume less bread
- There will be a decrease in quantity demanded.
b) Discovery of a new cheaper way of milling flour
--the new discovery of a new cheaper way of milling flour may encourage new suppliers to mill flour or it may encourage existing suppliers to mill more flour. All in all there’s an increase in supply.
c) Price of other grains of rise
- Others grains of rise work as substitute goods so if there price goes up then demand for them will decrease, and if their price falls the demand for them will increase.
Question 4:
a)
Coursework
Rodoula Makri
ECON101-EN
Question 1:
a) Price of substitute good falls
- As seen on the diagram above when price of substitute product A rise, then demand for substitute product B rises accordingly. Positive relationship between the two. Shift to the right.
b) Taste shifts away from the good
- Whe the taste shifts away from the good it becomes less desirable, making its demand for it decrease. Shift to the left.
c) Price of complimentary good falls
- When the price of a complementary good falls that demand for the product as well as its complementary go up. Shift to the right.
d) Good become more expensive
- When a good becomes more expensive then the demand for it will decrease. Shift to the left.
Question 2:
a) Cost of production for a good falls
- When the cost of production become cheaper then supply goes up. Shift to the right.
b) Alliterative products become more profitable
- When alternative products become more profitable then suppliers stop using the less profitable products. Shift to the left.
c) Price of good rises
- When the price of a good rises the supply rises with it. Shift to the right.
d) Firms anticipate that the price of a good will fall
- If firms anticipate the price of a product will fall in the near future, they may choose to supply more of the product now.
Question 3:
a) People consume less bread
- There will be a decrease in quantity demanded.
b) Discovery of a new cheaper way of milling flour
--the new discovery of a new cheaper way of milling flour may encourage new suppliers to mill flour or it may encourage existing suppliers to mill more flour. All in all there’s an increase in supply.
c) Price of other grains of rise
- Others grains of rise work as substitute goods so if there price goes up then demand for them will decrease, and if their price falls the demand for them will increase.
Question 4:
a)