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Answers To Econ Workbook Unit 4

1) As the demand for ink cartridges decreases due to inkjet printers and ink cartridges being complements, the demand curve for ink cartridges shifts left, decreasing the equilibrium price and quantity. 2) As the cost of producing leather shoes increases, the supply curve shifts left, increasing the equilibrium price and decreasing the equilibrium quantity. 3) If the increase in supply of textbooks due to lower production costs is greater than the increase in demand from more students, then the price of textbooks will decrease.

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22 views5 pages

Answers To Econ Workbook Unit 4

1) As the demand for ink cartridges decreases due to inkjet printers and ink cartridges being complements, the demand curve for ink cartridges shifts left, decreasing the equilibrium price and quantity. 2) As the cost of producing leather shoes increases, the supply curve shifts left, increasing the equilibrium price and decreasing the equilibrium quantity. 3) If the increase in supply of textbooks due to lower production costs is greater than the increase in demand from more students, then the price of textbooks will decrease.

Uploaded by

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F.

4 Econ Workbook Chp 4 Changes in demand and supply


Part I : Multiple Choice
C D
01-3 01-4
A C D C C C C
01-5 01- 02-7 02-9 03-8 03- 04-6
10 14
C C C --
05-5 06-6 06-8
B A B D A B D A
07-10 08-5 09-5 09-6 09-7 10-6 10-8 Sample
15
C D D B A A C A
Practi 12- 13- 13- 13- 14- 14-14 15-15
ce 13 10 11 12 12
A B C D C A D B
16- 16- 17- 17- 18- 18- 18- 19-13
14 16 14 17 13 16 20
A D
20-14 20-
12

Part II : Short Questions


1a) (5 marks)
P
S

P1
P2
D2 D1
Q2 Q1 Q
As inkjet printers and ink cartridges are complements, the demand
for ink cartridges will decrease. The demand curve for ink
cartridges will shift left from D1 to D2.
As a result, the equilibrium price will decrease from P1 to P2 and
the equilibrium quantity will decrease from Q1 to Q2.

b) (5 marks)
P

1
S2 S1

P2
P1
D1
Q2 Q1 Q
As the cost of production increases, the supply of leather shoes will
decrease.
The equilibrium price of leather shoes increases and quantity
transacted decreases.

c) - HOS flats and private housing are substitutes. (1m)


- Demand for private housing decreases. (1m)
- Price of private housing decreases. (1m)
P
S Diagram (2m)

P1

P2

D2 D1
Q
Q2 Q1

Change in demand versus change in quantity demanded


P May

P1

2
P2

0 D Q
Q1 Q2
P
June S

P2
P1

0 D1 D2 Q
Q1 Q2
May is correct because there is a decrease in price of down jackets, the
quantity demanded of down jacket increases.
June is correct because there is an increase in demand for down jacket.
The demand curve shifts right from D1 to D2
The equilibrium price increases from P1 to P2.
The equilibrium quantity demanded increases from Q1 to Q2.

3.a
As the cost of production decreases, there is an increase in supply of
textbooks. (2m)
As the number of students increases, the demand for textbooks
increases. (2m)
ii)

(3m)
If the increase in demand is smaller than increase in supply, the price
of textbooks will decrease. (1m)

b)

3
(3m)
There is a decrease in the supply of gasoline. (1m) Since gasoline
and cars are complements (1m), there is a decrease in the demand
for gasoline. (1m) When the decrease in supply is greater than the
decrease in demand, the price increases. (1m)
5.
a) P S

New shortage
Tuition
fee Old shortage D1 D2

0 Quantity of university places in HK

As the tuition fee is below the equilibrium level, there is a shortage. (1m)
There is an increase in demand for university places in HK (1m), so the
excess demand increases. (1m)

a. Diagram (2m)

4
When the tunnel toll is set below the equilibrium level, there is a shortage. (2m)

b. Private cars consist of more than half of the tunnel traffic (from Source D) and the
number of persons in the vehicles is very low (from Source E)

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