Chapter 3, Where Prices Come From: The Interaction of Demand and Supply Video Solutions, Macroeconomics

02:26

Problem 1

What is a demand schedule? What is a demand curve?

Daniel Cisneros

Numerade Educator

01:36

Problem 2

What do economists mean when they use the Latin expression ceteris paribus?

Daniel Cisneros

Numerade Educator

02:08

Problem 3

What is the difference between a change in demand and a change in quantity demanded?

Daniel Cisneros

Numerade Educator

01:55

Problem 4

What is the law of demand? Use the substitution effect and the income effect to explain why an increase in the price of a product causes a decrease in the quantity demanded.

Daniel Cisneros

Numerade Educator

03:49

Problem 5

What are the main variables that will cause the demand curve to shift? Give an example of each.

Daniel Cisneros

Numerade Educator

02:30

For each of the following pairs of products, briefly explain which are complements, which are substitutes, and which are unrelated.
a. New cars and used cars
b. Houses and washing machines
c. UGG boots and Apple Watches
d. Apple Watches and Apple iPads

Daniel Cisneros

Numerade Educator

01:08

Problem 7

An article in the Wall Street Journal titled "Auto Sales Zoom, Helped by Low Prices at the Pump" includes a graphic showing increasing car and truck sales in one panel and decreasing gasoline prices in the other panel. Does the graphic assume that autos and gasoline are substitutes or complements? Briefly explain.

Daniel Cisneros

Numerade Educator

01:52

Problem 8

(Related to the Chapter Opener on page 73) A number of industry analysts believe that smartphone prices will decline over the next few years. If these forecasts are correct, what will be the effect on the demand for smart- watches? Briefly explain.

Daniel Cisneros

Numerade Educator

03:19

Problem 9

State whether each of the following events will result in a movement along the demand curve for McDonald's Big Mac hamburgers or whether it will cause the curve to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right and draw a graph to illustrate the shift.
a. The price of Burger King's Whopper hamburger declines.
b. McDonald's distributes coupons for $\$ 1.00$ off the purchase of a Big Mac.
c. Because of a shortage of potatoes, the price of French fries increases.
d. Fast-food restaurants post nutrition warning labels.
e. The U.S. economy enters a period of rapid growth in incomes.

Daniel Cisneros

Numerade Educator

01:40

Problem 10

Suppose that the following table shows the quantity demanded of UGG boots at five different prices in 2016 and $2017 :$
$$
\begin{array}{|r|r|}\hline \text { Price } & {2016} & {2017} \\ {\$ 160} & {5,000} & {4,000} \\ {170} & {4,500} & {3,500} \\ {180} & {4,000} & {3,000} \\ {190} & {3,500} & {2,500} \\ {200} & {3,000} & {2,000}\end{array}
$$

Oluwadamilola Ameobi

Numerade Educator

01:56

Problem 11

Suppose that the curves in the following graph represent two demand curves for traditional chicken wings (basket of six) at Buffalo Wild Wings. What would cause a movement from point A to point $B$ on $D_{1} ?$ Name two variables that if their values were to change would cause a movement from point A to point $C .$

Daniel Cisneros

Numerade Educator

01:36

Problem 12

Related to the Making the Connection on page 77$)$ Both smartwatches and smartphones use applications, or "apps," which are software that consumers can download and use to

Daniel Cisneros

Numerade Educator

01:34

Problem 13

(Rolated to the Making the Connection on poge 78) Since 1979. China has had a policy that allows couples to have only one child. This policy has caused a change in the demographics of China. Between 1980 and 2013, the share of the population under age 14 decreased from 36 percent to 18 percent. And, as parents attempt to ensure that the lone child is a son, the number of newborn males relative to females has increased. Choose three goods and explain how the demand for them has been affected by China's one-child policy.

Daniel Cisneros

Numerade Educator

01:07

Problem 14

Suppose the following table shows the price of a base model Toyota Prius hybrid and the quantity of Priuses sold for three years. Do these data indicate that the demand curve for Priuses is upward sloping? Briefly explain.

$$\begin{array}{|c|c|c|}\hline \text { Year } & \text { Price } & \text { Quantity } \\\hline \mathbf{2 0 1 4} & \$ 31,880 & 35,265 \\\hline \mathbf{2 0 1 5} & 30,550 & 33,250 \\\hline \mathbf{2 0 1 6} & 33,250 & \mathbf{3 6 , 4 6 6} \\\hline\end{array}$$

Daniel Cisneros

Numerade Educator

00:55

Problem 15

An article in the Wall Street Joumal noted that an "increase in the price of oil quickly reduces demand for oil." Do you agree with this statement? Briefly explain.

Daniel Cisneros

Numerade Educator

01:04

Problem 16

A journalist wrote the following about the effects of falling gasoline prices: "With lower prices, demand rises and people consume more." Briefly explain whether you agree with the journalist's analysis.

Daniel Cisneros

Numerade Educator

01:54

Problem 17

(Rolated to the Moking the Connection on page 81) According to an article in the Wall Street Journal in 2015, "Apple Inc.'s surging smartphone sales in China may have busted a myth: that many Chinese consumers couldn't, or wouldn't, shell out for an iPhone." The article noted that iPhone sales were growing faster in China than in the United States, Europe, or other high-income countries.
a. Why would sales of iPhones be likely to be growing faster in China than in the United States and in other high-income countries?
b. Why were many industry analysts surprised by Apple's strong sales in China? Would forecasting sales in the United States be easier or harder than forecasting sales in countries such as China? Briefly explain.

Zachary Zhao

Numerade Educator

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