2 Macro Topic 1.6
Changes in Equilibrium
Assume that only hamburgers are made from ground beef and that hot dogs and hamburgers are
perfect substitutes. Pickles are a complement for hamburgers and mason jars are used to package
pickles and jelly. Show what will happen in each market if the price of ground beef significantly
increases.
A. Market for hamburgers
B. Market for hot dogs
c. market for pickles
d. market for mason jars
e. market for jelly

A. Market for hamburgers -- decreases

B. Market for hot dogs - increases

c. market for pickles --decreases

d. market for mason jars ---decreases

e. market for jelly-- no effect

Explanation:

A. Market for hamburgers

Since, hamburgers are made of beef, of price of beef increases, then price of hamburgers also increases and hence as consumers are price sensitive for normal goods market for hamburgers will decrease

B. Market for hot dogs :

As price for hamburger will increase, consumers will start looking for alternatives. as given that hot dogs are perfect substitute, market for hot dogs will decrease

c. market for pickles : Given that pickles are complementary for hamburgers. If market for hamburgers has decreased, its complementary good will also be less in demand and hence market for pickles will decrease.

d. market for mason jars : now we know that market for pickles has decreased,  hence goods require to pack it will be in less demand and hence market for mason jars will decrease as well

e. market for jelly: Since dependency for jelly not given, it is not impacted by any of the above goods and hence market for jelly not be imapcted and it will remain same.