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Answer increase or decrease for the following items

1. Vehicle owners wishing to drive into central London must purchase passes to do so costing about $13.00 (as of 6-2011) per day. The policy is attempting to reduce traffic congestion and pollution. It has been in effect for several years. A long-term effect of the policy is to _______________ the demand for office space in Central London thus increasing building vacancies.

2.   The price of petrol in London (as of 6-2011) was about $12 - $13 per gallon. As a result, the demand         for bicycles is _________________.

3.   Vehicle license plates in England increase sharply in price the older is the age of the vehicle. As a result, the demand for new vehicles is _________________ and the demand for used vehicles is ______________. This policy encourages the purchase of ever more efficient vehicles.

4.  Monthly rates for single-line household plain old telephone service (POTS) keeps increasing. Cell phone rates increase too, but their service plans offer more options when the rate is increased. Many therefore are _____________ their demand for plain old telephone service.

5.  I have my own Italian espresso machine. Occasionally I opt for a commercial medium-sized Latte for $3.44 a drink. My favorite coffee store has, however, raised the price to $3.99 per drink. I am thus likely to ______________ my demand for their Lattes

Variables typically included in a multivariate supply function (other than the price and quantity of the item the supply function represents) are prices of other goods that use similar input resources for production, expectations, the number of suppliers, techniques of production, taxes and subsidies, and prices of input resources, weather. Please answer the following questions about the affect changes in other variables might have on the supply of the item. These changes will either cause supply to increase (shift right) or decrease (shift left). Use either word as applicable, for the short answer.

  1. It is rumored that refiners are taxed 5.4 cents/gallon more than they are taxed for gas mixed with Ethanol. The tax is used to pay farmers to grow more corn. The result is an ____________ in the supply of Ethanol.
  2.  E-book readers can now be bought for about $100. Digital books are considerably cheaper than printed versions.   Predictably then the supply of e-books will _____________.
  3. T. Boone Pickens spent millions of his own money advertising the benefits of "Cleaner American- Produced Natural Gas" as an alternative vehicle fuel. Advertising seeks to increase the demand for an item. Suppose instead he had spent his millions to help service stations install natural gas fueling equipment (pumps ??). This would be an effort to _____________ the supply of readily available natural gas fueling facilities
  4. Think of highways as a resource used in the production of highway transportation. Thus building more and better highways is likely to _______________ the supply of vehicles using them.
  5. A problem getting the public to buy automobiles equipped to use both gasoline and natural gas as fuel is the cost of adding natural gas capability to the vehicles. Suppose a small amount of tax was added to the cost of a gallon of gas (maybe one cent, for example). This would make funds available to manufacturers to pay for installations of natural gas using vehicles, thus ______________ the supply of these vehicles on the road.

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