HO_02_201_Sp03

HO_02_201_Sp03 - growing additional units of good X to make...

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Cal Poly Pomona, EC 201 Principles of Microeconomics – Professor Brown Handout # 2 1) Consider the four graphs below. Show how the demand and supply curves shift. a) Show the effect of an increase in b) Show the effect of an increase in the price of the Incomes of potential buyers of good X. Y, a substitute for good X. Assume X is an inferior good c) Show the effect of a decrease in the d) Show the effect of bad weather that increases the cost of price of inputs (= factors of production) used
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Unformatted text preview: growing additional units of good X to make good X. e) Consider just the demand curve for good x (ignore the supply curve). If the price of good x falls, holding all else constant (ceteris paribus), does the demand curve for x shift? If not, why not? If so, in what direction? Price of X Price of X Price of X Price of X Quantity of X Quantity of X Quantity of good x Downward sloping Demand Curve Quantity of good x Demand An upward sloping Supply Curve Supply...
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