[ MT445 | Managerial Economics ] Unit 2 Assignment Student Name: Colleen Egan Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed. 1. Analyze what would happen to equilibrium price and quantity in the market for Pepsi if the following occurred (be sure to indicate WHY it happens as well): a. The price of Coke decreases. The price of Coke decreases, so demand will also increase, while the demand for Pepsi will decrease because it is a more expensive product. b. Average household income falls from $50,000 to $43,000 The average worker will have $7,000 less per year in disposable income. The Government will have less income taxes collected, which can affect funding for schools, road repairs, and healthcare services amongst other things. It is likely that workers will be overqualified and making less money to live off of, so they may not purchase big ticket items such as cars or homes, thereby further decreasing the supply and demand for various goods and services. c.
[ MT445 | Managerial Economics ] Unit 3 Assignment Student Name: Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed. 1. Is the price elasticity of demand for gasoline more elastic over a shorter or a longer period of time? Explain. Short-run price elasticity of demand has decreased in absolute value by up to an order of magnitude in the past decade, meaning that consumers have become significantly less responsive to changes in gasoline price. 2. Is the price elasticity of supply, in general, more elastic over a shorter or a longer period of time? Explain. The longer the time period a firm has to adjust its production, supply is likely to be more elastic. In the short run, the firm may not be able to change its factor inputs. 3 . Why is the supply curve for labor usually upward sloping? Because when someone with a high income is willing to accept a somewhat lower income in exchange for more leisure. The market labor supply curve is determined by adding up the