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Question: answer questions 1 though 5...

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Answer questions 1 though 5
Econ 206 Dr. George Problem Set #2 1) Consider the market for burritos (like Chipotle) a. Draw a supply and demand graph that shows the equilibrium price equal to $3.50 and the equilibrium quantity equal to 200 per day. Show the area of the graph that represents consumer surplus and the area that represents producer surplus On the graph, show the effect when the price of pizza falls (assuming that pizza and chipotle are substitutes). What happens to the equilibrium price and quantity? On a new graph, show the effect when the wages paid to Chipotles employees falls. What happens to the equilibrium quantity and price? On another new graph, show the effect when the incomes of its customers increase. What happens to the new equilibrium quantity and price? On another new graph, show the effect of an expected increase in the pr over the next few weeks. What happens to the equilibrium price and quantity? b. c. d. e. ice of burritos 2) Pizzas and hamburgers are substitutes. Recently the equilibrium price of both has increased Can this be explained by a news report indicating that eating beef creates a health risk? Explain why or why not on a separate graph for each market (pizzas and hamburgers). Can the price change be explained by higher wages paid to workers in the pizza industry? Again, use two graphs in your answer a. b. 3) The equilibrium price of laptop computers has declined over the past few years while the equilibrium quantity sold has decreased. Propose an explanation for this pattern. Show that you are correct using a supply and demand graph Show on a well-Jabeled graph what will happen in the market for college professors in the following scenario: A large demographic bulge ends, and the number of potential college students declines. At the same time, there is an increase in retirements of older college professors. Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a separate demand and supply diagram for each to support your answers. 4) 5) a. The number of people at the most common ages for home-buying increases. b. Because of a threat of a war, people become uncertain about their economic future c. The overall level of saving in the economy diminishes. d. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans
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