Which one of the following will cause the demand curve for hamburgers to shift t

Question

Which one of the following will cause the demand curve for hamburgers to shift to the right for restaurants in London?

A. The price of hamburgers decreases.

B. The price of fish and chips (a substitute in consumption) decreases.

C. Average income levels decrease in London and consumers treat hamburgers as normal goods.

D. A study is published by the National AssOciation for Burger Research that says eating burgers can reduce the risk for bad acne.

Oil is a primary component in the manufacture of plastic bags. If the price of oil were to increase, the equilibrium price of plastics bags would:

A. increase and the equilibrium quantity would increase.

B. increase and the equilibrium quantity would decrease.

C. decrease and the equilibrium quantity would increase.

D. decrease and the equilibrium quantity would decrease.

The government imposes price controls for many agricultural products in an effort to support farmers. If the government imposes a price floor at P 2 in the accompanying figure, what is the impact in the market?

a. a shortage of 30,000 units.

b. a surplus of 30,000 units.

c. a surplus of 120,000 units.

d. no surplus or shortage. The market will be in equilibrium.

Dick's Sporting Goods lowered the price of hockey pucks from $5 to $3 and as a result the quantity sold in Lexington stores increased from 100 to 150 sold per week. Using the midpoint method, the price elasticity of demand, I En I ,is:

a. 0.80

b. 1.00

c. 1.25

d. 25

Explanation / Answer

1. Ans: A study is published by the National AssOciation for Burger Research that says eating burgers can reduce the risk for bad acne.

Explanation:

When the study says eating burgers can reduce the risk for bad acne, people will demand more humburger at current price. This will lead to a rightward shift in the demand curve for hamburgers.

2. Ans: increase and the equilibrium quantity would decrease.

Explanation:

An increase in the price of inputs(oil) leads to increase in cost of production of plastic bags. An increase in cost of production will lead to leftward shift in supply curve. It means the new equilibrium is established where the equilibrium price of plastics bags would increase and the equilibrium quantity would decrease.

3. Figure is missing. So, it can not be answered.

4. Ans: 0.80

Explanation:

PED = ?Q/?P *( P1 + P2 / Q1 + Q2)

        = (150 - 100) / (3 -5) * (3 + 5) / (100 + 150)

        = (50 / -2) * (8 + 250)

        = -0.80

The absolute value of PED is 0.80

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