Question

a) People decide to have more children. This will affect [Select] , so demand for minivans will [ Select] ^ , thus the market price of minivans will [Select] and the market equilibrium quantity will [Select] b) The price of station wagons rises. This will affect [Select] , so demand for minivans will [ Select] , thus the market price of minivans will [ Select] and the market equilibrium quantity will [ Select] c) A recession reduces average family income. This will affect [Select] , so demand for minivans will [ Select] hus the market price of minivans will [ Select ] and the market equilibrium quantity will [ Select ]

a) People decide to have more children. This will affect [Select] , so demand for minivans will [ Select] ^ , thus the market price of minivans will [Select] and the market equilibrium quantity will [Select] b) The price of station wagons rises. This will affect [Select] , so demand for minivans will [ Select] , thus the market price of minivans will [ Select] and the market equilibrium quantity will [ Select] c) A recession reduces average family income. This will affect [Select] , so demand for minivans will [ Select] hus the market price of minivans will [ Select ] and the market equilibrium quantity will [ Select ]

a) People decide to have more children. This will affect [Select] , so demand for minivans will [ Select] ^ , thus the market price of minivans will [Select] and the market equilibrium quantity will [Select] b) The price of station wagons rises. This will affect [Select] , so demand for minivans will [ Select] , thus the market price of minivans will [ Select] and the market equilibrium quantity will [ Select] c) A recession reduces average family income. This will affect [Select] , so demand for minivans will [ Select] hus the market price of minivans will [ Select ] and the market equilibrium quantity will [ Select ]

Options for each question A-D:

First dropdown menu for each question (pick one): this will affect...

-tastes and preferences

-prices of complements

-prices of substitutes

-expectations about future prices

Second dropdown menu for each question (pick one): for minivans will...

-increase

-decrease

Third dropdown menu for each question (pick one): market price of minivans will...

-increase

-decrease

Fourth dropdown menu for each question (pick one): market equilibrium quantity will...

-increase

-decrease

Answer 1

Case 1: People decide to have more children. This will affect tastes and preferences, so demand for minivans will increase, thus the market price of minivans will increase, and the market equilibrium quantity will increase. This happens because increase in the demand due to changes in the tastes and preferences will shift the demand curve upward to the right, as a result, both the equilibrium price and quantity will increase.

Case 2: The price of station wagons rises. This will affect prices of substitutes, so demand for minivans will increase, thus the market price of minivans will increase, and the market equilibrium quantity will increase. This happens because increase in the demand due to increase in the price of substitute good will shift the demand curve upward to the right, as a result, both the equilibrium price and quantity will increase.

Case 3: A recession reduces average family income. This will affect tastes and preferences, do demand for minivans will decrease, thus the market price of minivans will decrease, and the market equilibrium quantity will decrease. This happens because reduction in the average family income reduces the purchasing power of families.