Question

1) Do you see any contradiction between these two statements? Using demand and supply theory of...

1) Do you see any contradiction between these two statements? Using demand and supply theory of price determination, please explain.

a)  After the financial crisis of 2007-08, the price of houses was falling. As the economy is growing in recent years, many people are buying houses, which is leading to increase in price
of houses.
b) As the price of houses is increasing people are buying fewer houses.

2) Which of the two statements does represent the law of demand.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

The law of demand states that if price of goods increases, quantity demanded decreases and vice versa.

Statement 1

As we see in first statement, ' many people are buying houses ' means increases in demand of houses but the price of the houses is increasing. According to the law of demand, the price of houses will decrease as the demand of the houses increases. This statement contradict the law.

Statement 2

'As the price of the houses is increasing people are buying less houses' this means as the price increases, demand of the house automatically decreases. This follow the law of demand.

Answer 2

Statement 2 represents the law of demand

Add a comment
Know the answer?
Add Answer to:
1) Do you see any contradiction between these two statements? Using demand and supply theory of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • NOSSASSINS Use demand and supply analysis to answer each of the following questions. Assume that the...

    NOSSASSINS Use demand and supply analysis to answer each of the following questions. Assume that the respective market is in equilibrium before the change takes place. Graphically analyze whether there is a movement or a shift in the appropriate curve and then determine the effect on the equilibrium price and quantity. Draw a separate diagram for each question in each market. In the wheat market: A new fertilizer is developed with a lower cost The government imposes a new tax...

  • Which of the following is an example of Say’s law? During the 2008-10 many people hoarded...

    Which of the following is an example of Say’s law? During the 2008-10 many people hoarded money instead of purchasing goods.. The economy of the country of Wakanda has set fixed prices and wages for both the short and long term. The automotive industry, in order to create more output, need to focus on increasing production rather than demand. If you were to explain to a friend how the macroeconomy would be influenced by neoclassical policies, which of the following...

  • as many as you can please 23. When demand and supply both decrease, the impact on...

    as many as you can please 23. When demand and supply both decrease, the impact on price and quantity is that the shifts reinforce each other with respect to quantity, which decreases, but they act as countervailing forces along the price axis. (TRUE/FALSE)? 24. How would you characterize the term business cycle? A. Short-term fluctuation in economic cycle B. Long-term fluctuation in economic activity c. Short-term fluctuation in economic activity D. None of the above 25. You are in a...

  • Using supply analysis, explain how is supply applied in the article below about Tesla.? Thank you...

    Using supply analysis, explain how is supply applied in the article below about Tesla.? Thank you so much for your help. Factors Affecting Supply (Tesla) The Cost of Production and Cutting Off Unprofitable Vehicle Models In January of 2019, Tesla cut 7% of its workforce to ramp up production of its Model 3 sedans, reducing the price of its products and boosting margins. At the same time, the company discontinued the cheapest versions of its Model S sedans and Model...

  • Could someone take notes and explain  for me from these pragraph with explantation. Thank you advance las...

    Could someone take notes and explain  for me from these pragraph with explantation. Thank you advance las inferior Goods Firms producing inferior goods do not benefit from a boom- ing economy. One such example is the pawnshop industry, which suffered during the economic prosperity of the late 1990s and 2000, as fewer people swapped jew- elry and other items for cash to cover car payments and other debts. Although pawnshops have always suffered from a somewhat disreputable image, the strong economy...

  • 41 The money supply is a curve that is typically drawn as a vertical line on...

    41 The money supply is a curve that is typically drawn as a vertical line on the standard money supply - money demand graph that is used in the study of monetary policy. We all know the money supply is only controlled by the Federal Reserve Bank. Conclusion: In the audio visual lecture Professor Torres stated that anytime we see a supply curve drawn as a vertical curve line, then that means that the product or service is 100 percent...

  • Do all parts please. No explanation needed. Part 1: Most of the reduction in poverty rates...

    Do all parts please. No explanation needed. Part 1: Most of the reduction in poverty rates since World War II occurred as a result of the 1996 welfare reforms. 1940s War On Poverty. 1960s War On Poverty. end of "welfare as we know it." Part 2 Policies focused on putting people to work by having them construct parks would be considered demand-side policies. monetary policies. supply-side policies. demand-side and supply-side policies. Part 3 A 15-year old that wants a job...

  • D Question 1 1 pts Consider the market for raspberries in Australia. Which of the following...

    D Question 1 1 pts Consider the market for raspberries in Australia. Which of the following would most likely lead to a decrease in demand O A decrease in the price of gooseberries, a substitute for raspberries. An increase in the price of blueberries, a complement for raspberries A decrease in income if raspberries are an inferior good. O A severe frost that destroys most of the Tasmanian raspberry crop. Both a and b are correct. DI Question 2 1...

  • 1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World...

    1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...

  • How do you feel about airlines mining your in flight data? Is this any different from companies mining your credit...

    How do you feel about airlines mining your in flight data? Is this any different from companies mining your credit card purchases or web surfing? IDENTIFYING MARKET NICHES IN THE AGE OF BIG DATA With the amount od data avallable to companies dou questions can be answered, authors wll need bling every year, nee sources of data, and innova- tions in data collection, possibilities foe marketers to on the large publishing houses signing deals with dentify market niches and finely...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT