Demand Analysis

question 26

Essay

Demand Analysis. The demand for refrigerators is often described as cyclical, and very sensitive to refrigerator prices and interest rates. Given these characteristics, describe the effect of each of the following in terms of whether it would increase or decrease the quantity demanded or the demand for refrigerators. Moreover, when price is expressed as a function of quantity, indicate whether the effect of each of the following is an upward or downward movement along a given demand curve or instead involves an outward or inward shift in the relevant demand curve for refrigerators. Explain your answers.
A. An increase in refrigerator prices
B. A fall in interest rates
C. A rise in interest rates
D. A severe economic recession
E. A robust economic expansion

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Definitions:

Biotechnology

The use of living systems and organisms to develop or make products, or any technological application that uses biological systems, living organisms, or derivatives thereof.

Military Technology

Technology developed and used by the armed forces to gain advantage in warfare.

Normal Accidents

A concept proposing that in complex systems, accidents are inevitable due to the unforeseeable interaction of multiple failures.

Technological Determinism

The theory that society's technology drives the development of its social structure and cultural values.