I need help.

Elwood · February 5, 2002

I have 2 questions left out of 100 and they're due tomorrow. Can anyone that knows about this stuff help me out please?

1. Suppose the price of gasoline and other petroleum products to decline sharply. Which of the folloing will most likely occur as a result of the lower petroleum prices?

A) an increase in the demand for solar heating systems.

B) an increase in demand for larger, more powerful automobiles

C) an increase in demand for home insulation products

D) an increase i demand for gasoline

I think it is B because the only other one that make sense is D and it would increase the Quantity Demanded, not just the demand. Am I right?

2. WHen economists say the demand for a product has decreased, they mean that

A) the demand curve has shifted to the left.

B)the product price has increased, and, as a consequense, consumers are buying less of the product.

C)consumers are now willing to and able to buy more of this product at each possible price.

D) consumers no longer value the product.

I think it is A or D but I'm not sure which one to pick.

Any help would be appreciated. Thanks.

Jpshostr · February 5, 2002

Quantity Demanded, not just the demand

Isn't this saying the same thing? I would say D since after a sharp drop it would take a much longer time for B to occur, D would be a much quicker result and more easily attributed to the drop in price.

For the second one, I'm gonna say A. I remember the professor saying something about demand curves about a week ago, but I was drifting between conscousness and that false-sleep so much that I don't remember much. Is there a more boring class than econ? How do the people that major in this find it interesting enough to last four years?

pacodiablo · February 5, 2002

for the first one id say B....D would be a result of B.

Jpshostr · February 5, 2002

for the first one id say B....D would be a result of B.

D would be the result of more people taking longer trips and burning more fuel than going out and buying big vehicles. Just look at the way fuel demand fluculates now, when people stay near home in February, demand is low, but once the kids are out of school and vacation season comes, look out, that demand peaks. Yes, to a point more demand can come from larger vehicles, but more people driving will make a much larger impact.

NewbieZ71 · February 5, 2002

I say B then D. I think its easy to read too much into the questions. They dont appear to be trick quesitons so to speak. My only hesitation is that demand for gas would go up much quicker than the demand for bigger autos.

Elwood · February 5, 2002

I'm pretty sure that a change in price of a product changes the Quantity Demanded of that product, but changes the demand of other products. Quantity Demanded is when the point on the Demand Curve moves along that curve, Demand is when the whole curve moves.

A drop in price would cause people to want more gasoline, moving the point on the demand curve to the right (or down) along that curve. But it would also cause more people to buy larger vehicles because they're not as worried about gas mileage; more people buying larger vehicles causes the demand curve for those vehicles to shift to the right.

But that's my logic, and I'm not 100% sure.

As for the boring part. There can't be anything more boring, and the worst part is that I'm an Education Major, and I spent an hour today in the library tutoring 2 business majors in this class. The teacher doesn't even know the stuff, he has powerpoint that was written buy the book publishers and he reads it to us as he show it to us, and that's it. If you ask him a question he'll spend more time looking for the answer in the book than answering it.