Find the flaws in reasoning in the following statements

Reference no: EM13900604

Find the flaws in reasoning in the following statements, pay- ing particular attention to the distinction between shifts of and movements along the supply and demand curves. Draw a diagram to illustrate what actually happens in each situation.

a. "A technological innovation that lowers the cost of pro- ducing a good might seem at first to result in a reduc- tion in the price of the good to consumers. But a fall in price will increase demand for the good, and higherdemand will send the price up again. It is not certain, therefore, that an innovation will really reduce price in the end."

b. "A study shows that eating a clove of garlic a day can help prevent heart disease, causing many consumers to demand more garlic. This increase in demand results in a rise in the price of garlic. Consumers, seeing that the price of garlic has gone up, reduce their demand for garlic. This causes the de- mand for garlic to decrease and the price of garlic to fall. Therefore, the ultimate effect of the study on the price of garlic is uncertain."

Reference no: EM13900604

Questions Cloud

Would demand schedule still be valid for an inferior good : Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from $21 to $19) is due to a rise in consumers' income? Explain clearly (and briefly) why or why not.

Write a critical analysis of charlotte perkins gilman : Write a critical analysis of Charlotte Perkins Gilman: The Yellow Wallpaper

Determine the earnings per share disclosure for hazard guard : Hazard experienced earthquake damage to a regional sales office resulting in a before-tax extraordinary loss of $200,000. The income tax rate was 40%. Determine the earnings per share disclosure for Hazard Guard.

How does your answer explain your ultimate life goals : How does your answer explain your ultimate life goals? Expectations? Hopes? Fears? Purpose? If it does not explain any of these things, why not

Find the flaws in reasoning in the following statements : Find the flaws in reasoning in the following statements, pay- ing particular attention to the distinction between shifts of and movements along the supply and demand curves. Draw a diagram to illustrate what actually happens in each situation.

Explain the key characteristics of power : Power is a central concept in the study of international politics. Define power and explain the key characteristics of power to illustrate how states and other international actors effectively exercise power in the international arena. In your opi..

Polaris financial statements in appendix : Refer to Polaris financial statements in Appendix A to answer the following.

What will happen price at which fishermen can sell lobsters : Draw the demand curve and the supply curve for Maine lobsters. What are the equilibrium price and quantity of lobsters?

Military involvement support the vital national interest : As President Obama observed, "It is in our vital national interest to send an additional 30,000 U.S. troops to Afghanistan." What vital national interest is a risk in Afghanistan and how does our military involvement support the vital national int..

User Account

All Pages