ECO 2013 Lecture Notes - Lecture 6: Economic Equilibrium, Economic Surplus, Demand Curve

Summer is ending. Now that consumers no longer are going to the beach there is a vertical shift down in demand of 20 at each price point. In other words, the new demand curve is: P = 380 – Q. The supply curve stays the same. a. Find the market equilibrium price and quantity. b. Calculate consumer surplus and producer surplus..

4. Summer is ending. Now that consumers no longer are going to the beach there is a vertical shift down in demand of 20 at each price point. In other words, the new demand curve is: P = 380 – Q. The supply curve stays the same. a. Find the market equilibrium price and quantity. b. Calculate consumer surplus and producer surplus. .there is only this information on this question

a. An increase in the price of Post Frosted Mini Wheats (a substitute for Kellogg Frosted Mini Wheats) should

shift the Demand curve for Kellogg Frosted Mini Wheats to the right.
shift the Demand curve for Post Frosted Mini Wheats to the left.
cause the Demand curve for Pepsi to shift to the right.
cause no shift in the Demand curve for Kellogg Frosted Mini Wheats.
cause the Demand curve for Kellogg Frosted Mini Wheats to shift to the left.

b. Assuming Demand is downward sloping and Supply is upward sloping (as we usually do), what happens to equilibrium price and quantity of a good when Supply decreases?

c. Suppose frictional unemployment is typically UF = 3.0% and structural unemployment is typically US = 2.0%, then what is the "natural" rate of unemployment, UN?

The price of peanuts increases. At the same time, we see the price of Jelly rise. How does this affect the market for peanut butter?

A. the demand curve will shift to the left; the supply curve will shift to the left.

B. the demand curve will shift to the left; the supply curve will shift to the right.

C. the demand curve will shift to the right; the supply curve will shift to the left.

D. the demand curve will shift to the right; the supply curve will shift to the right.

I understand that the supply curve shifts to the left, but how does the demand curve shift to the right considering the price of its complement product (Jelly) increased? I've learned that the increase in the price of a complement product makes demand decrease. Could you please explain why the answer is C.?