3. Graphically illustrate the each of the following and note the change in price and equilibrium quantity: a. An increase in consumer incomes when the good is inferior (ceteris paribus). b. An increase in the cost of inputs of supply (ceteris paribus). A simultaneous increase in demand and supply.

3. Graphically illustrate the each of the following and note the change in price and equilibrium quantity: a. An increase in consumer incomes when the good is inferior (ceteris paribus). b. An increase in the cost of inputs of supply (ceteris paribus). A simultaneous increase in demand and supply.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 6CQQ

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Question

3. Graphically illustrate the each of the following and note the change in price and equilibrium
quantity:
a. An increase in consumer incomes when the good is inferior (ceteris paribus).
b. An increase in the cost of inputs of supply (ceteris paribus).
C.
A simultaneous increase in demand and supply.

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Step 1: Define demand and supply curves

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Step 2: a. Draw demand and supply curve with increase in income and the good is inferior

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Step 3: b. Draw the effect of increase in cost of production.

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Step 4: c. Draw the graph with the price and quantity increases simultaneously.

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