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For each of the following draw a separate diagram

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Question

Problem 1;For each of the following draw a separate diagram to demonstrate the answer. (Hint: Remember the difference in a change in demand [supply] and a change in quantity demanded [supplied]. Don't shift both curves unless appropriate). Describe what happens to equilibrium price and sales. Explain why or why not this makes sense in the real world.;a. Show the effect on the U.S. new construction residential housing market in the event of a severe economic recession.;b. Show the effect on the U.S. air travel market if American Airlines unexpectedly folds (ceases operations) overnight.;c. Show the effect on the U.S. domestic car market if the price of foreign cars increases due to an exchange rate shock.;d. Show the effect on the market for large SUVs if the price of gasoline in the U.S. comes to rest at greater than $4 per gallon.;e. Show the effect of setting the price of Super Bowl tickets at a price lower than equilibrium price.

 

Paper#30664 | Written in 18-Jul-2015

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