Question

5. How is each of the following events likely to shift the supply curve or the demand curve for fast-food hamburgers in the United States? Make sure you indicate which curve (curves) is affected and if it shifts out or in. a. The price of beef triples. b. The price of chicken falls by half. c. The number of teenagers in the economy falls due to population aging. d. Mad cow discase, a rare but fatal medical condition caused by cating tainted beef, becomes common in the United States e. The Food and Drug Administration publishes a report stating that a certain weight-loss diet, which encourages the f. g. intake of large amounts of meat, is dangerous to one's health. An inexpensive new grill for home use that makes delicious hamburgers is heavily advertised on television. The minimum wage rises

Answer 1

a. The price of beef triples.

Supply Curve Shifts In.

Reason: As beef is an input for hamburgers, increase in price of beef increases the cost of hamburgers. Restaurant has to charge more for their burgers and consumers can buy less with the money they have also movement along the demand curve.

b. The price of chicken falls by half.

Demand Curve Shift In.

Reason: more people would buy chicken (substitute for beef) instead of burgers.

c. The number of teenagers in the economy falls due to population aging.

Demand Curve Shift In

Reason: the number of consumers will decrease (Teens more likely to buy burgers).

d. Mad cow disease, a rare but fatal medical condition caused by eating tainted beef, becomes common in the United States.

Demand Curve Shift In, (Supply Curve could Shift In if cattle population is diminished)

e. The Food and Drug Administration publishes a report stating that a certain weight-loss diet, which encourages the intake of large amounts of meat, is dangerous to one’s health.

Demand Curve Shift In

Reason: consumers tastes change

f. An inexpensive new grill for home use that makes delicious hamburgers is heavily advertised on television.

Demand Curve Shifts In.

Reason: Consumers can substitute their fast food burger with home cooked.

g.The minimum wage rises.

Supply Curve Shifts In because it increases the cost of the producing hamburgers.