Using Supply-And-Demand Diagrams, Show and Explain the Effects of the Following

question 126

Essay

Using supply-and-demand diagrams, show and explain the effects of the following events on the price of CD-Rs and the quantity of CD-Rs sold. For each event, identify which of the determinants of demand or supply is affected, how it influences demand or supply, and what happens to the equilibrium price and quantity.
a) The price of a CD burner falls.
b) Workers who make CD-Rs get a pay raise.
c) Producers introduce new cost-saving technologies in their CD-R production plants.
d) Consumers' incomes increase and CD-Rs are a normal good.
e) Free peer-to-peer music exchange through the Internet becomes legal.

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Definitions:

U.S. Assets

Properties, investments, and other financial resources owned by individuals, businesses, and the government in the United States.

Gold Standard

A monetary system where a country's currency has a value directly linked to gold, allowing it to be exchanged for a specific amount of gold.

Gold Certificates

Certificates that were once issued by the United States government, representing a specific value of gold bullion held by the Treasury.

Trade Deficits

A situation where a country's imports exceed its exports, resulting in a negative balance of trade.