Managerial Economic

#1: (30 pts) consider the market for minivans. For each of the events listed here, identify (1) whether the event affects supply or demand (note: each event will cause only one of the curves to shift), (2) whether demand (or supply) increases or decreases, (3) what happens to equilibrium price (does it rise or fall?) and (4) what happens to equilibrium quantity. Use the supply and demand diagrams below to illustrate the effects and answer the questions posed above. (you can use the drawing tools (insert-shape) to add the new demand supply curve to your diagram.)

1. People decide to have fewer children

1. Engineers develop new automated machinery for the production of minivans

1. A tariff on imports raises steel prices

1. The economy moves out of a recession and unemployment rates fall

( c. )

( Demand Supply ) ( Demand Supply )a. b.

c. d.

( Demand Supply ) ( Demand Supply )