The second step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity.
b. decide whether the economic change being analyzed affects demand or supply.
c. draw a demand and supply model before the economic change took place.
d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
b. decide whether the economic change being analyzed affects demand or supply.
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If workers in Mexico produce fewer goods and services per hour than workers in the United States in all areas of production, then
A) Mexico will benefit from trade with the United States, but the United States will not. B) the United States will benefit from trade with Mexico, but Mexico will not. C) neither Mexico nor the United States will benefit from trade with the other. D) both the United States and Mexico will benefit from trade with the other. E) it is unknown whether either country can benefit from trade with the other.
Which of the following would NOT be a sign that China wants to become a high technology producer?
A) More patents are being sought and granted in China B) Large spending on infrastructure C) Rapid expansion of science, engineering and research D) Less emphasis on education spending
Sustained federal deficits tend, other things the same, ________
A) to decrease income inequality in the United States B) to decrease income inequality in Europe but not the United States C) to increase income inequality in the United States D) have little effect on the distribution of income in market economies
Assume that the MPC is 0.75. If government spending increases by $400, equilibrium output ________; and if taxes increase by $400, equilibrium output ________.
A. increases by $1,600; decreases by $1,600 B. increases by $1,200; decreases by $1,600 C. increases by $1,600; decreases by $1,200 D. increases by $400; decreases by $400