Supply and Demand
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Each of the following situations will cause the supply of hamburgers or
the demand for hamburgers or both the supply of and the demand for hamburgers
to change.
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In each situation state whether supply will change (and whether it will
increase or decrease or there will be no change) and why or whether demand
will change (and whether it will increase or decrease or there will be
no change) and why or whether both supply and demand will change and why.
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Also in each situation state what will happen to the equilibrium price
of hamburger as a result of the stated change in supply and/or demand (will
it increase or decrease or is the resulting change unknown) and what will
happen to the equilibrium quantity of hamburger as a result of the stated
change in supply and/or demand (will it increase or decrease or is the
resulting change unknown).
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The price of pizza increases from $2.50 per slice to $ 3.50 per slice.
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Emigration reduces the number of hamburger eaters and the number of cattle
ranchers.
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Medical science publishes new evidence that eating hamburgers is healthy.
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Technological change allows more beef to be produced from a given amount
of feed.
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The price of beef increases from $2.25 to $4.00 per pound.
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A recession reduces consumers’ incomes. (What type of good are you assuming
hamburgers to be?)
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The government raises the per pound excise tax on hamburgers from $.25
to $.40 at the same time that the price of french fries (eaten with hamburgers)
increases.
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Both consumers of hamburgers and producers of hamburgers believe the price
of hamburger meat will decrease in the near future.
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The current price of hamburgers increases.
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Paul Hamm becomes the spokesperson for McDonalds.
After you have completed the above exercise, with your partner(s) use your
favorite search engine to locate an Internet site
which discusses supply, demand, and the changing price of a product or
service. Write a short summary of the article concentrating on the factors
affecting supply and demand. Be sure to include the web address of the
site on this summary (or attach a copy of the article).
When you have finished, exchange your summary with another group's summary.
Each group should comment on the other group's summary. (Be sure to note
who is making the comments.)
McConnell
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ECO 212
Last updated August 31, 2004
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jbremer@oakton.edu