Read the following newspaper
headlines. In each case decide if the event will cause a change in the market
demand for beef. If you think the demand will increase, write “increase” to the
left of the word “reason”. If not, write “decrease”. Support your answer with
the reason why demand shifted. (complementary, substitute, income,
taste/preference, or population).
1.
Price of beef
rises
____________________Reason_________________________
2.
Millions of
immigrants pour into the United
States
___________________Reason__________________________
3.
Pork prices drop
______________Reason_______________________
4.
Surgeon general
warns that eating beef can be hazardous to your health
___________________Reason__________________________
5.
Average wages
drop for the 3rd month in a row
___________________Reason__________________________
6.
Newest fad is
eating beef hamburgers with anchovies
___________________Reason__________________________
7.
Higher price of
charcoal threatens memorial day cookouts
___________________Reason__________________________
8.
Chicken cures
many forms of cancer
___________________Reason__________________________
9.
Consumer are
given 20% more back in their tax returns
___________________Reason__________________________
10.
WWIII kills 1/3
of the males in the U.S.
___________________Reason__________________________
For each of the scenarios:
A. Sketch a rough demand curve for each of the
scenarios below and graph the demand change with a dotted line and label the
curves.
B.
Identify the reason for the demand change (i.e. substitute effect, income
effect, etc.)
C.
Identify as
increase or decrease in demand 1. What happens to the demand for Oranges if my paycheck becomes larger due to decreased taxes?
2. What happens to the demand for Cotton clothing if Polyester becomes a big fad.
3.
What happens to
the demand for Hot Dog Buns
if hot dogs are determined to be cancer causing.
4.
What happens to
the demand for live Gold fish if
people learn to like the flavor of live goldfish
5.
What happens to
the demand for Coke if the cost
of the ingredients is Pepsi increases so much
that Pepsi must raise its cost by 50% while
Coke prices stay the same.
6.
What happens to
the demand for Milk if the price
of cereal falls to an all time low.
7.
What happens to
the demand for Pepsi if
Pepsi changes their recipe and many of
the consumers don’t like it.
Notes on Supply- Supply Notes:https://docs.google.com/file/d/0B_gpVfHfuRG2RWlEdi1pemN1U0E/edit?usp=drive_web
