macro problem set 2 - Intro to Macroeconomics Hoyoung Yang...

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Intro to Macroeconomics Hoyoung Yang Problem set #2 Chapter 3 Problem 9 During the parents weekend the demand of hotel room rises, but the supply remains constant. The change in demand shifts the entire demand curve upward. Thus the price of all the hotel rooms increases. Problem 11 As the New York Times reports the outbreak of mad cow disease in Nebraska, there would be a change in demand of chicken to substitute the consumption of cow meat. Thus the demand curve would shift upward. Moreover, as the new scientific discovery allows us to breed new breed of chicken that provides more meat, the supply curve would also shift upward. Increase in demand will lead to an increase in equilibrium price and quantity, and the increase in supply will lead to a reduction in equilibrium price and an increase in equilibrium quantity. Thus the equilibrium quantity of chicken sold will increase. However, we are not sure about the changes in the equilibrium price. Chapter 4
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This note was uploaded on 10/05/2010 for the course ECON econ princ taught by Professor Kim during the Spring '10 term at Yonsei University.

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macro problem set 2 - Intro to Macroeconomics Hoyoung Yang...

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