Question

i think i have the right idea here, but if someone could point me in the right direction before i start filling it out I would REALLY appreciate it.

Assignment: Supply and Demand Changes - Part 1 Principles of Macroeconomics Suppose we are analyzing the market for gasoline. Graphically illustrate the impact each of the following would have on demand or supply. Show how equilibrium price and quantity have changed on the diagram and beside the diagram, ceteris paribus. a. Summer arrives and the weather turns warmer. b. The price of cars, a complement good, decreases. c. The price of corn ethanol, a complement good, increases. d. Consumers decide to buy more gasoline powered cars.

Answer 1

This will increase consumption of fuel as people will be using Air conditioners and thus demand for Gasoline increases which increases equilibrium price and equilibrinn Quantity of Gasoline. .. (b) A decline in the price of complement good increases the demand of Gasoline and thus DD shifts right wards leading to increase in equilibrium price and Quantity. o As the price of complement increases, demand for the good falls leading to fall 9. in equilibrium price and at I duantity d) As demand for Gasoline powered cars increases, demand for Gasoline increases increasing equilibrium price and Quantity.