Prin Microeconomics (ECON 101)

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Part 1

State whether each of the following events will result in a movement along the demand curve for​ McDonald's Big Mac hamburgers or whether it will cause the curve to shift.

Part 2

The price of Burger​ King's Whopper hamburger

declinesdeclines.

This will cause

A.

demand for​ McDonald's Big Mac hamburgers to

increaseincrease.

B.

demand for​ McDonald's Big Mac hamburgers to

decreasedecrease.

C.

a movement along the demand curve for​ McDonald's Big Mac hamburgers.

Part 3

​McDonald's

distributesdistributes

​$1.00 off coupons. This will cause

A.

demand for​ McDonald's Big Mac hamburgers to

shift to the rightshift to the right.

B.

demand for​ McDonald's Big Mac hamburgers to

shift to the leftshift to the left.

C.

a movement along the demand curve for​ McDonald's Big Mac hamburgers.

Part 4

The price of fries increases due to a potato shortageThe price of fries increases due to a potato shortage.

This will  

A.

decrease the demand for McDonald's Big Mac hamburgersdecrease the demand for McDonald's Big Mac hamburgers.

B.

increase the demand for McDonald's Big Mac hamburgersincrease the demand for McDonald's Big Mac hamburgers.

C.

cause a movement along the demand curve for​ McDonald's Big Mac hamburgers.

Part 5

The U.S. economy enters a period of

declinedecline

in incomes. This will cause

A.

demand for​ McDonald's Big Mac hamburgers to

shift to the leftshift to the left

if they are inferior goods.

B.

demand for​ McDonald's Big Mac hamburgers to

shift to the rightshift to the right

if they are inferior goods.

C.

a movement along the demand curve for​ McDonald's Big Mac hamburgers if they are normal goods.

The recent recession that began in December 2007 resulted in declining incomes as some people lost their jobs and others were forced to work fewer hours or have their wages reduced. How did this affect the market for

fast food restaurantsfast food restaurants

left parenthesis an inferior good right parenthesis(an inferior good)​?

Part 2

In the figure to the​ right, show how the recent recession likely affected the market for

fast food restaurantsfast food restaurants.

Using the line drawing

tool​,

draw either a new supply curve

​(Upper S 2S2​)

or a new demand curve

​(Upper D 2D2​).

Properly label your line.

Part 3

Carefully follow the instructions​ above, and only draw the required object.