Economics 620 week 2: problem set


1.) Basic S&D concepts:

a. Describe (in terms of graphs) the basic difference between a decrease in supply of SUVs and a decrease in quantity supplied of SUVs. Give a possible cause for each change.

b.  “When there’s a shortage of gold, the price of gold will increase. This then causes the 

demand for gold to decrease and the supply to increase.” There are word-&-logical errors in this statement. Rewrite it, to make it into a perfectly correct statement (about the same idea; do not write about some other idea).

c.  “If Best Buy offers a rebate on the Sony 50″ HDTV set, then the demand for the TV set will increase and that will reduce its supply.” There are word-&-logical errors in this statement. Rewrite it, to make it into a perfectly correct statement (about the same idea; do not write about some other idea).

2.) Read the article “Over a Buck for Dinner? Outrageous” (Business Week March 9, 2009, p. 57) and apply S&D analysis to answer the following questions.

a. The “sales drop” described in the third paragraph refers to a decrease in 

______________ (D/Qd). The “excess dinners” that ConAgra had to peddle to discounters (3rd paragraph) refers to a _________ (shortage / surplus).

b. Rodkin’s “first priority” described in the 4th paragraph is intended to shift which side of his market: S? or D? And which way: right? or left? 

c. Boxed meals and canned soup – are they normal goods, or inferior? Explain. When the economy expands, will it be a boost to the makers of these items – or a drag?

3.) S&D applications: Describe the correct shift in the S&D graph for each market identified (in bold letters) below:

a. If auto-workers receive a 20%-pay hike, how will the market for new cars be affected? 

b. If the teenage population increases, how will the market for rock-music recordings be affected? 

c. If cigarette taxes are reduced, how will the market for tobacco leaves be affected? (Hint: Correctly analyze the relationship between cigarettes and tobacco leaves from farms. Then analyze the S&D for tobacco leaves.) 

d. When gasoline price rises significantly, how is the market for gas-guzzlers affected? 

4.) Read the article “The Future of Food: Crisis prevention” (The Economist, February 26, 2011, 

p.12). Focus on the first paragraph in the section titled “Idle Speculation”. It lists the following factors that are affecting food prices. Determine which side (supply vs. demand) of the “world food” market is affected by each of these factors, and also specify which way the effect goes (increase or shift right, versus decrease or shift left). The “world food market” is the global trading (S&D) of food, including grains, among countries.

a. Drought and floods that destroyed crops in major food exporters like Russia, Canada, 


b. Export bans by … (read/understand the paragraph) 

c. Panic buying … restocking … reserves (read/understand the paragraph) 

d. Weaker dollar making restocking easier

e. Dearer oil … (read/understand the paragraph)

f. And the remainder of the article further identifies the following factors that would affect food prices over coming decades. Analyze each of these as you did those above: Changes in diet that rising wealth brings 

g. Slowdown in growth of farm crop-yields 

5.) More S&D applications: Specify whether each group named will gain or lose, and discuss how/why they gain or lose.

a. If the President imposes tariffs (taxes) on imported steel, how does this affect domestic steel-makers? How does this affect the domestic appliance-manufacturers? [Hint: Draw the S&D for “imported steel”, and draw a separate S&D for “local steel”. Analyze how the tariff on imported steel will affect each of these two separate but related markets. Then draw the S&D for “appliances” and study how it is affected by your results in the steel-market analysis.] 

b. If Europe removes restrictions on Chinese textiles/garments that could be sold in Europe, how does this affect European garment producers? How does this affect European buyers/consumers? 

6.) “Corn Has Deep Economic Roots” (USA Today Jan 25, 2007, p.3B) discusses the wide economic reach that the corn market has, which became starkly clear a few years ago. In each of the following, identify the correct shift in the S&D graph for the bolded market (i.e., S vs D shift? right vs left?)

a. How did the heightened emphasis on ethanol as a substitute-fuel a few years ago affect the corn market? 

b. How did the corn situation in (a) in turn affect the hogs/chickens market back then? Briefly explain the shift that you show in your S&D graph

c. How did the corn situation in (a) affect the soybeans market then? Briefly explain the shift that you show in your S&D graph

d. How was the farm-equipment S&D affected by the developments in corn?

e. The 5th column of the article states that livestock “producers are…reducing some  feeding” of their livestock. What does this “reduction” refer to: a decrease in D for feeds – or a decrease in Qd? Explain your answer.

f. How (or why) is the price of corn now linked to price of oil. In your answer, discuss what would happen in the corn market (draw the S&D graph for “corn”) if the price of oil falls significantly, as it did by 2009

7.) In 1999, after nearly 20 years of rent control in Berkeley (CA), the removal of the law led to a rise in rents of nearly 40%.

a. Describe how rent control affected the S&D graph for the rental-housing market: did 

this cause a shift in D or S ,or was it a change in Qs and Qd? Explain. 

b. Describe how the law’s elimination affected the rental-housing market. What 

happened to the number of rental units in the market?  

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Good work.
Customer 455119, May 27th, 2022
Business and administrative studies
On point.
Customer 459947, April 15th, 2022
Business and administrative studies
Customer 460073, July 2nd, 2022
very good job
Customer 456821, June 15th, 2022
Great quality work
Customer 462481, February 17th, 2022
Thank you for your promptness
Customer 453627, January 23rd, 2020
Finance/Acc Related
Good concept breakdown.
Customer 460073, July 9th, 2022
Good job.
Customer 462783, March 31st, 2022
Political science
Good comparison.
Customer 457487, April 17th, 2022
Art (Fine arts, Performing arts)
Great work!!!! I will absolutely come back. Thank you to the support team and the tutor they all did a wonderful work.
Customer 454055, February 18th, 2020
Excellent work!
Customer 463463, December 12th, 2022
Human Resources Management (HRM)
Good work.
Customer 462499, May 29th, 2022
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat