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Chapter 3: Q. 1 - Critical Thinking Questions (page 69)

What has been the direction of the shift in the demand for breakfast cereals?

Short Answer

Expert verified

Left.

Step by step solution

01

Step1. Given information

A negative change in the taste and preferences of people towards cereals.

02

Step2. Explanation

A negative change in taste and preferences have reduced the demand for the cereals. This shall lead to a leftward shift of the demand curve.

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Most popular questions from this chapter

For each of the following shifts in the demand curve and associated price change of complement or substitute item, explain whether the price of the complement or substitute must have increased or decreased.

a.Arise in the demand for a dashboard global positioning-system device follows a change in the price of automobiles, which are complements.

b.A fall in the demand fore-book readers follows a change in the price of e-books, which are complements.

c.Arise in the demand for tablet devices follows a change in the price of ultrathin laptop computers, which are substitutes.

d.A fall in the demand for physical books follows a change in the price of e-books, which are substitutes.

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incur expenses to refurbish storage tanks.)

Is there an inverse relationship between the price of cable TV and the number of subscriptions that people purchase?subscriptions Explain

Consider the market for paperbound economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied.

a. The market price of paper increases.

b. The market price of economics textbooks increases.

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d. Publishers expect that the market price of economics textbooks will increase next month.
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