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E202Solutions2.2 - 6 How will an increase in the birth rate...

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6. How will an increase in the birth rate affect the equilibrium price of land? Answer : An increase in the birth rate will increase the population of potential buyers of land, and hence shift the demand curve for land to the right, resulting in an increase in the equilibrium price of land. 9. Use supply and demand analysis to explain why hotel room rental rates in Bryan College Station during parents weekend and graduation weekends might differ from the rates charged during the rest of the year? Answer : Compared with the rest of the year, there are more people who want to stay in hotel rooms near campus during parents’ weekend and graduation weekends. Thus the demand curve shifts to the right during these weekends. This implies a higher equilibrium price for hotel rooms. 12. What will happen to the equilibrium quantity and price of potatoes if population increases and a new, higher yielding variety of potato plant is developed?
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