1. (Evolution of the household) Determine whether each of the following would increase or decrease the opportunity costs for mothers whoo choose not to work outside the home. Explain answers
a. Higher levels of education for women
b. Higher unemployment rates for women
c. Higher average pay levels for women
d. Lower demand for labor in industries that traditionally employ large numbers of women
2. (Tax Rates) Suppose taxes are related to income as follow
a. What percentage of income is paid in taxes at each level?
b. Is the tax rate progressive, proportional, or regressive?
c. What is the marginal tax rate on the first $1,000 ? The second $1,000? The third $1,000?
3.(substitutes and complements) For each of the following pair of goods, determine whether the goods are substitutes, complements, or unrelated:
a. Peanut butter and jelly
b. Private and public transportation
c. Coke and Pepsi
d. Alarm clocks and automobiles
e. Golf clubs and golf balls
4. (Demand Shifters) List 5 things that are held constant along a market demand curve, and identify the change in each that would shift that demand curve to the right – that is, that would increase demand
5. (Supply) Why is a firm willing and able to increase the quantity supplied as the product price increases?
6. (Equilibrium) Assume the market for corn is depicted as in the table that appears below.
a. Complete the table
b. What market pressure occurs when quantity demanded exceeds quantity supplied? Explain.
c. What market pressure occurs when quantity supplied exceeds quantity demanded? Explain.
d. What is the equilibrium price?
e. What could change the equilibrium price?
f. At each price in the first column of the table below, how much is sold?
Price per Bushel | Quantity Demanded (millions) | Quantity Supplied
$1.80 320 bushels 200 bushels
$2.00 300 bushels 230 bushels
$2.20 270 bushels 270 bushels
$2.40 230 bushels 300 bushels
$2.60 200 bushels 330 bushels
$2.80 180 bushels 350 bushels
***The remaining 2 columns of the table are “Surplus/Shortage” & “Will Price Rise or Fall?” ***