Running Head: ASSIGNMENT QUESTIONS 1

Assignment Questions

Institutional Affiliation

Date
ASSIGNMENT QUESTIONS 2

Question 1

Demand curves display the existing relationships linking the price and the amount demanded of a

consumption item at the given price (Cohn, 2015. If the consumers predict increase in the cost of

the goods in near future, the demand of this product increases today because the buyers resolve

to accumulate the stock of the good when it’s at its lowest price.

The price remains the same, and this causes a shift on the right of the initial demand curve D0 to

the new demand curve D1, and this is caused by the present increase on the demand of the

product from Q0 to Q1

Graphical presentation

D0 D1

Q0 Q1

Question 2

In this situation, like an economist, I would start by the construction of an economic model that

will help in the description and simplifying the task at hand (Chiappori, & Salanié, 2016). The

model is useful in the abstraction of data and creation of a working equation in finding a solution
ASSIGNMENT QUESTIONS 3

to the question. In the same situation, a carpenter who lacks economic knowledge will have

challenges in the development of the formal ways of solving the question at hand and probably

will not have a correct final solution.

ASSIGNMENT QUESTIONS 4

REFERENCES

Cohn, S. M. (2015). Reintroducing Macroeconomics: A Critical Approach: A Critical Approach.

Routledge.

Chiappori, P. A., & Salanié, B. (2016). The econometrics of matching models. Journal of

Economic Literature, 54(3), 832-61.