Principles of Economics- Mankiw (5th) 87

Principles of Economics- Mankiw (5th) 87 - CHAPTER 4 T H E...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 4 THE MARKET FORCES OF SUPPLY AND DEMAND 91 b. A strike by steelworkers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of station wagons rises. e. A stock-market crash lowers people’s wealth. 4. During the 1990s, technological advance reduced the cost of computer chips. How do you think this affected the market for computers? For computer software? For typewriters? 5. Using supply-and-demand diagrams, show the effect of the following events on the market for sweatshirts. a. A hurricane in South Carolina damages the cotton crop. b. The price of leather jackets falls. c. All colleges require morning calisthenics in appropriate attire. d. New knitting machines are invented. 6. Suppose that in the year 2005 the number of births is temporarily high. How does this baby boom affect the price of baby-sitting services in 2010 and 2020? (Hint: 5-year-olds need baby-sitters, whereas 15-year-olds can be baby-sitters.) 7. Ketchup is a complement (as well as a condiment) for hot dogs. If the price of hot dogs rises, what happens to
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

Ask a homework question - tutors are online