1. A market is in equilibrium with equilibrium quantity Q* and equilibrium price P*. What happens to P* if there is an increase in supply? What happens to Q* if there is a decrease in supply and a decrease in demand?What happens to P* if there is an increase in demand followed by a decrease in supply followed by another increase in demand?
2. The following table shows part of the demand for tickets to a local sporting event:
3.Use a hypothetical example to illustrate whether you agree or disagree with the following statement, "Unemployment will go up more if the demand for labor is inelastic, because the demand for labor will decrease more when you have inelastic demand than if demand were elastic".Explain why, using hypothetical numbers to illustrate your case.