practice problems

practice problems - A195.603 Microeconomics Practice...

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A195.603 Microeconomics Practice – Chapter 4 Dr. Carey Borkoski Directions: Graphically and verbally show what will happen to the demand curve given each of the following effects. Be sure to label your axes correctly and clearly illustrate the shift or movement along the demand curve. Practice #1 – Demand Only 1. Assume books and magazines are substitutes. What will happen in each of the book and magazine markets if the price of magazines increases? 2. What will happen in the lemonade market the price of fruit punch decreases (assume fruit punch and lemonade are substitutes) and at the same time the number of buyers in the market for lemonade also increases? 3. What will happen in the market for cats if the income of the population who buy cats increase and at the same time the price of dogs decreases. Assume dogs and cats are substitutes and that cats are normal goods. 4. Assume Spam is an inferior good. What will happen in the market for Spam if the income of the people who buy Spam goes down?
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practice problems - A195.603 Microeconomics Practice...

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