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If Alberta slips into its own recession, depict what will happen in the market for U.S....

If Alberta slips into its own recession, depict what will happen in the market for U.S. vacations by Albertans (Draw a graph with labelled axis)

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Answer #1

If Alberta dips into a recession the unemployment rises and as a result of this the income of the Albertans reduces. This would mean that now the Albertans would have less to spend on vacations. As a result of this, the demand for US vacations by the Albertans would reduce. This is to say that the demand curve moves towards the left.

As you can see in the graph the supply curve remains the same while the demand curve moves to the left. The equilibrium quantity movies from q1 to q2. Hence the market for US vacations by the Albertans shrinks to a lower quantity.

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