Project #45824 - Econ 203 Week 2 Homework

Week 2 Homework

 1a) What is a demand curve?

          *How does an increase in quantity demanded differ from an increase in demand?

         *What factors cause demand to increase?

 

1b) What is a supply curve?

         *How does an increase in quantity supplied differ from an increase in supply?

         *What factors cause supply to increase?

 

2a) During a recession, would you rather be working in an industry that produces a normal good or an

      inferior good?   Elucidate.

 

 2b) Suppose that the minimum wage in the market for labor is abolished. What is the likely impact on the

       unemployment rate? Explain.

 

2c) Use the graph in Question 3.6 at the end of Chapter 4 (page 93).

        *At the market equilibrium, find the price and quantity of CD players.

        *Describe what happens when price is $100.

        *Describe what happens when price is above $150.

 

3) Use the scenario described in Question 6.9 at the end of Chapter 4 (page 95).  Describe a supply and demand

     graph that explains an increase in equilibrium price and quantity.   

 

4a) What is the relevance of the price elasticity of demand (Ed)? Explain.

4b) How does the short-run price elasticity of demand for gasoline compare to its long-run price elasticity of

      demand?  Elucidate.

4c) Use the scenario in Question 2.11 at the end of Chapter 20 (page 434).

 

        *Find the changes in ridership over a one-month period (the short run) and a two-year period (the long

          run). Show your work.

       *Will total fare revenue increase or decrease over the one-month period? Will total fare revenue increase or

         decrease over the two-year period?  Explain.

 

5a) What is the relevance of the price elasticity of supply (Es)?  Explain. 

5b) How does the short-run price elasticity of supply for gasoline compare to its long-run price elasticity of

       supply?  Elucidate.

5c) Using the scenario in Question 6.6 at the end of Chapter 20 (page 437):

         *What happens to the equilibrium price of apartments if demand is expected to increase by 15%?

            Show your work.

 

6a) Using the scenario in Question 4.7 at the end of Chapter 20 (page 435):

         *What happens to transit ridership when the price of gasoline increases by 30%, while the price of public

           transit is held constant (at $2)?  Explain.

         *What happens to transit ridership when the price of gasoline increases by 30%, while the price of public

           transit increases by 30%? Elucidate. {You can assume that Ed for transit ridership is 1/3 or 0.333.}

 

6b) If a 20% increase in income increases the quantity of widgets demanded by 30%, what is the income

       elasticity of demand for widgets? Explain.

 

          *Are widgets considered to be normal or inferior goods? Why?

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Due By (Pacific Time) 11/02/2014 02:00 pm
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