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(A) What is the difference between a movement along a demand or supply curve and a shift of one of these curves? Why is it important to distinguish between the two?
What mistake might a businessperson make if he or she failed to make this distinction?
Consider the following newspaper excerpt explaining the increase in milk prices which occurred a few years ago:
"The biggest force driving up milk prices is the same one that has driven up prices for conventional commodities like iron ore and copper: a roaring global economy. Rising incomes in emerging economies from China and India to Latin America and the Middle East are lifting millions of people out of poverty and into the middle class."
Explain this excerpt in terms of movements along and shifts of curves. Does this excerpt assume anything about whether milk is a normal or inferior good?
(B) Describe an industry in which an unanticipated shift in demand had an important impact. What was this impact? What difference would it have made had the shift been anticipated? What was the effect of any shifts in industry supply?
The NJ Bureau of Employment gathered the following sample information on the number of hours unemployed workers spent looking for work last week. Hours Spent Searching Number of Un
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Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
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Q. Describe the working of Commercial banks? Fact that currency inside commercial banks isn't money may strike you as odd though it is an important principle. 100 dollar bill i
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