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What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? a. Small automobiles become more fashionable: No change . b. The price of large automobiles
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37 votes
37 votes
What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? a. Small automobiles become more fashionable: No change . b. The price of large automobiles rises (with the price of small autos remaining the same): (Click to select) . c. Income declines and small autos are an inferior good: (Click to select) . d. Consumers anticipate that the price of small autos will greatly come down in the near future: (Click to select) . e. The price of gasoline substantially drops: (Click to select) .

User Saurabh Maurya
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13 votes
13 votes

Answer:

a. Small automobiles become more fashionable:

demand curve will shift to the right, increasing total quantity demanded and prices

b. The price of large automobiles rises (with the price of small autos remaining the same):

demand curve will shift to the right, increasing total quantity demanded and prices

c. Income declines and small autos are an inferior good:

demand curve will shift to the right, increasing total quantity demanded and prices

d. Consumers anticipate that the price of small autos will greatly come down in the near future:

demand curve will shift to the left, decreasing total quantity demanded and prices

e. The price of gasoline substantially drops:

demand curve will shift to the left, decreasing total quantity demanded and prices

User Shubham Chandel
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3.3k points
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