ECON 2003 – Fundamentals of Economics

Subject: Economics    / General Economics
Question

ECON 2003 Fundamentals of Economics Name _________________

Department of Management and Marketing

College of Business

PVAMU Assignment #1

Answer all the questions. Show all the steps, not only the final answer. Use graph paper where a graph is needed. Number your pages and staple the pages together. No rough edges. These exercises can be found in the textbook by William Boyes and Michael Melvin, 6th edit. The assignment is worth 20 points and is due at the beginning of the class. Penalty will apply to assignments due after that time.

Exercise #3, on page 28

Exercise #1, on page 53

Exercise #2, on page 53

Exercise #3,on page 53

Exercice #9, on page 53

Answer also the following questions:

To answer these kinds of questions you need to draw the graphs and clearly show the changes, if any, and the direction of the changes. Soyou have to say what will happen to the demand and/or supply for product and to the equilibrium price and quantity (increase, decrease, or stay the same).

a. Let’s assume that the market for pizza is in equilibrium, then we obtain some new information that eating pizza make people live longer. How would this new information affect the market for pizza? That is, you have to say what will happen to the demand and or supply for pizza and to the equilibrium price and quantity (increase, decrease, or stays the same?).

b. Let’s assume that the market for pizza is in equilibrium, then we obtain some new information that workers in the pizza industry have requested and obtained higher wages. How would this new information affect the market for pizza? That is, you have to say what will happen to the demand and or supply for pizza and to the

equilibriumprice and quantity (increase, decrease, or stays the same?).

c. Let’s assume that the market for pizza is in equilibrium, then we obtain some new information that eating pizza makes people gain so much weight, and the same time, we learn that the price of cheese used to make pizza has gone down. How would this new information affect the market for pizza?