Answer the following questions in grammatically correct...

Answer the following questions in grammatically correct sentences 1. There is no difference between change in demand and change in quantity demanded. Do you agree or disagree? Explain. 2. What is the difference between normal good and inferior good? 3. Discuss briefly complementary goods and supplementary goods. 4. What are the advantages and disadvantages of the price system? 5. Predict what will happen to either supply or demand in the following situations: a. Several new companies enter the home computer industry. b. Consumers suddenly decide large cars are unfashionable. c. The U.S. surgeon general issues a report that tomatoes prevent colds. d. A new type of robot is invented that will pick peaches.

Transcript

00:03 Hello, there are several questions.

00:05 Let's start with the first one.

00:09 Which of the following will not cause an increase in the supply of good x? so let's start with answer option a.

00:23 An improvement in the technology used to produce good x.

00:29 So here we have an improvement in technology.

00:35 So let me save some space.

00:39 For a, we have improvement in technology and this will lead to an increase in supply.

00:53 It's a positive change for our suppliers, so supply will increase.

00:57 But you ask me which of the following will not cost.

01:00 So this one is not correct.

01:04 Okay, now b, an increase in the price of good y.

01:10 Increase of the price of good y.

01:15 And this one is a substitute.

01:22 So you don't specify is it a substitute in production or maybe it's just a substitute for consumers.

01:35 So since you did not specify i guess that this is about substitutes for consumers so consumers use good y and x as substitutes and this don't have any relation to supply so there is no any change i mean there is no any effect okay see decrease in the price of inputs.

02:10 So price of inputs and this is the good good news for suppliers.

02:17 This will increase the supply so here let me put that b is not correct.

02:29 I forgot to mark.

02:31 So again supply will increase this answer is not correct and lastly d an increase in the price of inputs and this will decrease the supply so this one is correct and d is our answer to this question.

02:54 So please choose d for this part.

02:58 Okay the second part if the restaurant increases menu by 5 % and it's given that the elasticity of demand is equal to 2.

03:11 Okay price elicist of demand is equal to 2.

03:15 Demand is elastic and the restaurant increases menu prices by 5%.

03:24 So if there is 5 % increase in the price we multiply this by negative 2 because price price elasticity of demand is always negative and we have negative 10%.

03:47 So quantity demanded will decrease by 10%.

03:54 And now we need to just to find which asphor option has decreased by 10 % and this one is a.

04:03 A, 10 % fall.

04:06 This is the answer to this question.

04:10 Okay, the third question.

04:14 Now price and cities of demand is 0 .5...

Question

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