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Demand for small automobiles

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Reference no: EM132263174

Part 1. What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

A. Small automobiles become more fashionable.

B. The price of large automobiles rises (with the price of other small autos remaining the same.)

C. Income declines and small autos are an inferior good.

D. Consumers anticipate the price of small auto will greatly come down in the future.

Part 2. What effect will each of the following have on the supply of auto tires?

A. A technological advancement in the method of producing tires?

B. A decline in the number of firms in the entire industry.

C. An increase in the prices of rubber used in the production of tires.

D. The expectation that the equilibrium price of auto tires will be lower in the future than currently.

Reference no: EM132263174

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