Question

Assume that you work in the beef industry. Beef is a normal good. Consider the following events.
What curve shifts (show the change), and what is the effect on equilibrium price and quantity in the beef industry.

No. 1 Event: A medical society publishes a study that beef contributes to heart disease.
a) What curve shifts (and show this change): __________________
b) Is there an increase or decrease in the price of beef: _______________
c) Is there an increases or decrease in quantity of beef: ______________

No. 2 Event: The price of feed grain, input to your industry, increases.
a) What curve shifts (and show this change): ___________
b) Is there an increase or decrease in the price of beef: _______________
c) Is there an increases or decrease in quantity of beef: ______________

Answer 1

1.a)The aggregate demand curve shifts to the left.

b)the price increases

c) the quantity decreases

2. a)The aggregate demand curve shifts to the right.

b)the prices decreases

c)the quantity increases