Can anyone help me with some macroeconomics questions? (1 Viewer)

[boulderhead]

Any help would be great, thanks guys!

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52. Looking at supply and demand curves, what would happen in a market for bike helmets if there is a substantial increase in the price of bicycles?
A) the supply curve will shift to the right
B) the supply curve will shift to the left
C) the demand curve will shift to the right
D) the demand curve will shift to the left

53. Looking at supply and demand curves, what would happen in the garment market if the wages of seamstresses rise?
A) the supply curve will shift to the right
B) the supply curve will shift to the left
C) the demand curve will shift to the right
D) the demand curve will shift to the left

54. Looking at supply and demand curves, what would happen in the leather goods market if the government lifts a ban on imported leather?
A) the supply curve will shift to the right
B) the supply curve will shift to the left
C) the demand curve will shift to the right
D) the demand curve will shift to the left

120. The govt proposes a tax on halogen bulbs in order to boost its revenue. Producers will bear the entire burden of the tax if the
A) demand curve for bulbs is vertical
B) demand curve for bulbs is horizontal
C) demand curve is downward sloping & supply is upward sloping
D) supply curve for bulbs is horizontal

 

[blakegman]

52. D
53. B
54. A
120. B


EDIT: read that as sales of bicycles rather then price. corrected answer.

 

[Zarathustra]

52-d
53-b
54-a
120-b

 

[Zarathustra]

If a good goes up in price, the demand curve for its complement will shift left.

 

[Chris.]

all C

 

[haiderr]

52. Could be (A) becoz when prices increase, people tend to produce more as they rcv more profits therefore increase in supply - Supply shift to right (this later means excess supply and therefore lower prices ...BUT that is not wat the question is asking)

OR (D) becoz increase prices will decrease demand = demand shift to left


53. (B) becoz when wages rise, cost of production rises, which means less profits, which means firms produce less. When firms produce less, supply decreases ie shifts to left.

54. (A) when a ban is lifted on imports, than that means there will be more imports therefore increase supply = Supply shift to right.

120. NO IDEA sorry!

 

[haiderr]

BUT IM SURE LAST QUESTION 120 CAN NOT BE (B) becoz when demand is horizontal, then Everyone is willing to buy at only ONE price, and no is willing to buy at a higher or lowerr price. This situation is just in theory, and never occurs in reality. A and D dont seem rite so im guessing (C)

 

[Studentleader]

52.D Even though its durable it is a "luxury" - lol
53.B Supply decreases as the cost of production increases
54.A Supply increases due to imports
120. B Horrizontal demand = demand is same no matter what price

 

[haiderr]

52.D Even though its durable it is a "luxury" - lol
53.B Supply decreases as the cost of production increases
54.A Supply increases due to imports
120. B Horrizontal demand = demand is same no matter what price

For Question 120. If demand is same no matter wat price, then Producers will NOT feel the full effect of the tax (as the question is asking) so it can NOT be (B)

 

[Zarathustra]

For Question 120. If demand is same no matter wat price, then Producers will NOT feel the full effect of the tax (as the question is asking) so it can NOT be (B)

The tax will be borne by either the consumer or the producer, if the consumer is not willing to pay more than a set price before the tax, and then the same price after the tax, then obviously the producer is bearing the cost. If demand is horizontal then as the supply line changes the amount demanded will also change, but it will be sold for the same price.

I think Studentleader means that the price for the good demanded will be the same not the quantity.

 

[Studentleader]

The tax will be borne by either the consumer or the producer, if the consumer is not willing to pay more than a set price before the tax, and then the same price after the tax, then obviously the producer is bearing the cost. If demand is horizontal then as the supply line changes the amount demanded will also change, but it will be sold for the same price.

I think Studentleader means that the price for the good demanded will be the same not the quantity.

I personally didn't know the answer of the question, the best justification is that there will be no demand unless at the set price, which is pretty silly of consumers.

In reality even if the good was highly elastic (as in they will only buy the product at a maximum of $x) consumers should still buy the good when its at $x-1 with the same quantity.

I think a more appropriate graph of this demand curve would be one in which the curve terminates at price $x.