Discouraged Workers and the Economy

Question 1

1. Using Microsoft Excel, draw a graph illustrating the supply and demand in this market.
Using Microsoft Excel, draw a graph illustrating the supply and demand in this market.
Price/Computer	Quantity Demanded	Quantity Supplied
200	1000	2200
175	1250	2050
150	1500	1900
125	1750	1750
100	2000	1600
75	2250	1450
50	2500	1300
25	2750	1150

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25

Volumes

Prices

Question 2

What is the equilibrium Price and Quantity in the market?

Your response comes here

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25

Volumes

Prices

Question 3

Now suppose the government imposes a special tax on these computers. Describe what would happen in this market in terms of the supply and demand curve.
Price/Computer	Quantity Demanded	Quantity Supplied	Price supplied + 100 tax
200	1000	2200	300
175	1250	2050	275
150	1500	1900	250
125	1750	1750	225
100	2000	1600	200
75	2250	1450	175
50	2500	1300	150
25	2750	1150	125
Your response comes here

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25 Supply + 100 tax 2200 2050 1900 1750 1600 1450 1300 1150 300 275 250 225 200 175 150 125

Volumes

Prices

Question 4

Disregard the new tax in part three. Now assume that the government imposes a price ceiling of $100 in this market, as a result of protests of price gauging by the sellers. What would happen to the price and quantity in this market?
Price/Computer	Quantity Demanded	Quantity Supplied	Price ceeling
200	1000	2200	100
175	1250	2050	100
150	1500	1900	100
125	1750	1750	100
100	2000	1600	100
75	2250	1450	100
50	2500	1300	100
25	2750	1150	100
Your response comes here

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25 Price ceeling 100 1000 1250 1500 1750 2000 2250 2500 2750 100 100 100 100 100 100 100 100

Volumes

Prices

Question 5

Disregard the events of part four. Assume that the manufacturers of this product lobby the government’s lawmakers, in terms of this product being an essential for college students but they are considering halting production due to the lack of profits. The lawmakers agree and now set a price floor at $150. What would happen in this market?
Price/Computer	Quantity Demanded	Quantity Supplied	Price ceeling
200	1000	2200	150
175	1250	2050	150
150	1500	1900	150
125	1750	1750	150
100	2000	1600	150
75	2250	1450	150
50	2500	1300	150
25	2750	1150	150
Your response comes here

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25 Price ceeling 150 1000 1250 1500 1750 2000 2250 2500 2750 150 150 150 150 150 150 150 150

Volumes

Prices

Question 6

If consumers’ expectations were such that they were concerned about the economy and jobs, what would you think would happen in this market?
Price/Computer	Quantity Demanded	Quantity Supplied	Lower demand for bad expectations
200	1000	2200	700
175	1250	2050	950
150	1500	1900	1200
125	1750	1750	1450
100	2000	1600	1700
75	2250	1450	1950
50	2500	1300	2200
25	2750	1150	2450
Your response comes here

Supply 2200 2050 1900 1750 1600 1450 1300 1150 200 175 150 125 100 75 50 25 Demand 1000 1250 1500 1750 2000 2250 2500 2750 200 175 150 125 100 75 50 25 Lower demand 700 950 1200 1450 1700 1950 2200 2450 200 175 150 125 100 75 50 25

Volumes

Prices