assign 1.2

 

1) Shift the curve to show what will occur in the milk industry if technological progress makes it cheaper and easier to produce milk.  

1. draw the market and label the initial price and quantity PE and QE,
2. decide which group (consumers or producers) is affected most directly and immediately then shift the curve
3. label the new price and quantity
4. compare the new Price and Quantity with the initial price and quantity

2) Market for Tutoring services.

P

QD

QS

QS’

$5

100

20

10

80

40

15

60

60

20

40

80

25

20

100

1. Graph the Demand and supply curve (make sure to label the graph properly)
2. Show the equilibrium price and quantity
3. Show on the graph the shortage and surplus areas
4. Assume baby-sitting cost went down, and the supply increased by 40 hours at each price.

• Show the new supply table in the provided space (Qs’)
• Graph the new supply curve and show the new equilibrium