1. Problems and Applications Q3 Consider the market for gas-powered small cars. Assume gas-powered small cars...

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1. Problems and Applications Q3 Consider the market for gas-powered small cars. Assume gas-powered small cars are a normal good. For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected by this event because it creates only a supply change, select the None option under the Demand Determinant column. Similarly, if supply is unaffected by this event because it creates only a demand change, select the None option under the Supply Determinant column. Event People decide to have more children. The price of electric small cars falls. The discovery of a new source of iron ore lowers steel prices. An economic recession lowers people s wealth. A number of major car dealers decide to switch from selling gas- powered cars to selling electric cars. Demand Determinant Supply Determinant Show the effect of the following event on the market for gas-powered small cars: People decide to have more children. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply ? Show the effect of the following event on the market for gas-powered small cars: The price of electric small cars falls. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply (?) Show the effect of the following event on the market for gas-powered small cars: An economic recession lowers people s wealth. Price of Gas-powered Small Cars I Supply Demand Quantity of Gas-powered Small Cars Demand Supply Show the effect of the following event on the market for gas-powered small cars: A number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply Show the effect of the following event on the market for gas-powered small cars: The discovery of a new source of iron ore lowers steel prices. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply 1. Problems and Applications Q3 Consider the market for gas-powered small cars. Assume gas-powered small cars are a normal good. For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected by this event because it creates only a supply change, select the None option under the Demand Determinant column. Similarly, if supply is unaffected by this event because it creates only a demand change, select the None option under the Supply Determinant column. Event People decide to have more children. The price of electric small cars falls. The discovery of a new source of iron ore lowers steel prices. An economic recession lowers people s wealth. A number of major car dealers decide to switch from selling gas- powered cars to selling electric cars. Demand Determinant Supply Determinant Show the effect of the following event on the market for gas-powered small cars: People decide to have more children. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply ? Show the effect of the following event on the market for gas-powered small cars: The price of electric small cars falls. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply (?) Show the effect of the following event on the market for gas-powered small cars: An economic recession lowers people s wealth. Price of Gas-powered Small Cars I Supply Demand Quantity of Gas-powered Small Cars Demand Supply Show the effect of the following event on the market for gas-powered small cars: A number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply Show the effect of the following event on the market for gas-powered small cars: The discovery of a new source of iron ore lowers steel prices. Price of Gas-powered Small Cars Supply Demand Quantity of Gas-powered Small Cars Demand Supply

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