Assignment: Economics Project
I) Using graphs, explain what will happen to equilibrium price and equilibrium quantity of a product as a result of each of the following scenarios:
i. A rise in the number of buyers and a decrease in the cost of producing the product.
ii. A decrease in the number of suppliers and an increase in the number of buyers.
iii. An increase in the cost of production and a decrease in consumers' income.
iv. Advances in the technology used to produce the product and a decrease in the price of a substitute good.
II) Explain the shifts in demand and/or supply that can result in the following observations: (Assume the demand curve is downward sloping and the supply curve is upward sloping.)
i. Both price and quantity rise.
ii. Price rises, quantity falls.
iii. Price rises, quantity doesn't change.
iv. Quantity rises, price doesn't change.
III) In each of the following cases, explain what effect the changes will have on the equilibrium price and quantity in the following markets:
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Market
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Change
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i) computer technicians
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The use of computers in business continues to expand; while at the same time, the number of graduates in computer technology program increases
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ii) anti-cholesterol drugs
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The cost of producing anti-cholesterol drugs increases; and at the same time, medical problems associated with high cholesterol continues to increase.
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iii) full-sized SUVs
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The government imposes a special excise tax on full-sized SUVs; while at the same time. Gas prices decrease dramatically.
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iv) organic spinach
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Medical reports indicate that spinach is an effective anti-cancer food; while at the same time a new, faster-growing variety of spinach is developed
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IV) Assume the market for coffee is initially in equilibrium.
i. Draw a demand and supply diagram to illustrate the initial equilibrium.
ii. Explain the impact on the market if there is simultaneously an increase in the price of coffee beans and a decrease in the price of tea.
iii. Graphically illustrate the impact on the diagram you prepared for part (i).
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.