Answer the questions in detail and provide examples. Include reference if you used one.
- 1. Some economists believe that supply determines what happens to demand while others believe demand determines what happens to supply. Explain both sides with examples.
- 2. The supply and demand for one product can affect the supply and demand for complementary items. Explain and give examples.
- 3. The supply and demand for one product can affect the supply and demand for substitute items. Explain and give examples.
- 4. What is “Elasticity?” Identify products which have an elastic demand. Identify products which have an inelastic demand. Identify products with a unitarily elastic demand. Explain what this means for all three.
- 5. A lot of rules in Economics are based off of having perfect competition. What is this? What does it mean to have an imperfectly competitive market? Explain with examples.