Question

Assume that the market for baseballs is in equilibrium. There is a sudden decrease in income throughout the economy. If all else is held constant, we would expect that if baseballs are a(n) ________ good, then the demand curve will shift to the ________, causing the equilibrium price and quantity to ________.

a. normal; left; rise
b. normal; right; rise
c. inferior; right; fall
d. normal; left; fall
e. inferior: left; fall

Answer 1

d. normal; left; fall

Step-by-step explanation:

When there is change in the value of the equilibrium it sometimes indeterminate, this due to the fact that it maybe possible for demand to decrease or increase more than the supply decreases or increase. The decrease in demand is been represented by a left shift of the demand curve . According to a supply and demand model for a fruit like orange, if the average household income experiences a decreases at the same time 10 tangerine will be out of business, A person might be expecting the equilibrium quantity of the oranges in the market to reduce and the equilibrium price of the oranges to be indeterminate.

Answer 2

d. normal; left; fall

Step-by-step explanation:

A shift in the demand curve of a product results from a change in other factors except from price. It results in a change in quantity demanded at all prices.

A shift to the right will result in an increase in quantity demanded at all price levels, while a shift to the left results on a decraese in quantity demanded at all price levels.

This is illustrated in the attached diagram. When there is a sudden decrease in income, it will result in less money available for buying baseball's.

The customer is only willing to buy at a lower price and quantity they can buy also decreases.

In the diagram there is a fall in price from P to P1, and a fall in quantity demanded from Q to Q1