ECS1501 ASSIGNMENT 5 SEMESTER 2 2023.

ECS1501 ASSIGNMENT 5 SEMESTER 2 2023.100% CORRECT questions, answers, workings and explanations.Suppose we observe that the equilibrium quantity of a particular good has increased significantly over the past 5 years, with virtually no change in the equilibrium price. The most likely explanation is that, over the past 5 years, both supply and demand have increased. Note, that you will lose 50% of the mark for this question if you choose the incorrect option. If you are not sure about the answer and do not want to guess, choose the “Unsure” option. You will neither receive marks for the question nor will you lose marks for choosing this option. True False Unsure An increase in demand is shown by a rightward shift of the demand curve leading to an increase in the equilibrium price and the equilibrium quantity. The increase in supply leads to a rightward shift of the supply curve and the equilibrium price decreases and the equilibrium quantity increases. Thus, the equilibrium price can either increase, decrease or stay the same (see diagram below) while the equilibrium quantity will increase.