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Economics Supplementary Worksheet

Section B
1. Recently, Samsung Galaxy Note 7 is notorious for battery
explosion. Show how the market of Galaxy Note 7 will be affected.
Factor: (Decrease in) Quality of Goods/Unfavorable
News
When Galaxy Note 7 is notorious for battery
explosion, the demand for Galaxy Note 7 decreases.
The demand curve shifts to the left from D1 to D2.
The equilibrium price decreases from P1 to P2. The
equilibrium quantity decreases from Q1 to Q2. The
new equilibrium is P2 and Q2.
2. Petroleum is said to be complement of cars. There is a reduction in
the price of petroleum. Show how the market of cars will be
affected.
Factor: (Decrease in) Price of Complements
When the price of petroleum decreases, the quantity
demanded of petroleum increases. Since petroleum
and cars are complements, the demand for car
increases. The demand curve of car shifts to the
right from D1 to D2. The equilibrium price increases
from P1 to P2. The equilibrium quantity increases
from Q1 to Q2. The new equilibrium is P2 and Q2.
3. To encourage the use of electricity cars, the government provides
a unit subsidy to electricity car producers. Show how the market
of electricity cars will be affected.
Factor: (Grant of) subsidy
The grant of unit subsidy to electricity car producers
lowers the cost of production of electricity cars. This
shifts the supply curve to its left from S1 to S2. The
equilibrium price decreases from P1 to P2. The
equilibrium quantity increases from Q1 to Q2. The
new equilibrium is P2 and Q2.
4. The government lowers the excise duty on energy-efficient car.
Show how the market of energy-efficient cars will be affected.
Factor: Indirect Tax (Deduction)
The reduction in indirect tax on energy-efficient cars
lowers the cost of production of energy-efficient
cars. This shifts the supply curve to its left from S1
to S2. The equilibrium price decreases from P1 to
P2. The equilibrium quantity increases from Q1 to
Q2. The new equilibrium is P2 and Q2.
5. ComeBuy drink is an inferior good to Ruby. Ruby enjoys a pay rise
this month. Show how Rubys market of ComeBuy drinks will be
affected.
Factor: (Rise in) Income
ComeBuy drink is an inferior good to Ruby. Inferior

good experiences a fall in demand with a rise in


income. The reduction in Rubys income would
reduce the demand for ComeBuy drinks. This shifts
the demand curve to its left from D1 to D2. The
equilibrium price decreases from P1 to P2. The
equilibrium quantity decrease from Q1 to Q2. The
new equilibrium is P2 and Q2.
6. There is an advancement of technology in the production of
garment. Show how the market of garment will be affected.
Factor: Advancement of Technology/Change in
Technology
The advancement in technology producers lowers
the cost of production of garment. This shifts the
supply curve to its left from S1 to S2. The
equilibrium price decreases from P1 to P2. The
equilibrium quantity increases from Q1 to Q2. The
new equilibrium is P2 and Q2.
7. It is said that organic vegetables have significant health benefits.
Show how the market of organic vegetables will be affected.
Factor: Trend and Fashion
Organic vegetables is said to have signification
health benefits, it means there is a trend of eating
organic vegetables for health. The demand for
organic vegetables increases. The demand curve
shifts to the right from D1 to D2. The equilibrium
price increases from P1 to P2. The equilibrium
quantity increases from Q1 to Q2. The new
equilibrium is P2 and Q2.