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This assignment is broken down into two parts, first part is to write a one-page essay on the following:
Law of Supply and Demand
The law of demand states that as prices increase the quantity demanded decreases. The law of supply states that as prices increase the quantity supplied increases. Using these two laws please answer the following questions:
• Explain how changes in prices result in a downward sloping demand.
• Explain how changes in prices result in an upward sloping supply.
• What will happen when consumer demand equals producer supply?
Make certain that you include in your explanation the concept of market equilibrium.
Answer each of these questions with at least 3 well-developed paragraphs.
In a 2-page essay the second part focuses on elasticity in microeconomics and how it impacts, influences, and shapes various products within an economic market. For this part, you will be addressing a series of questions around elasticity and will be required to conduct additional research in writing your responses. You will also provide, in your own words, definitions and examples of elasticity types. The APA formatted paper will be separated into two parts.
Part 1: Elasticity and Products
Choose any five products that exist within an economic market then classify and describe their ‘elasticity’ (relatively inelastic, relatively elastic, perfectly elastic, perfectly inelastic, unitary elastic).
In each case, please explain what would occur if:
• income increased
• loss of job
• a substitute was introduced
• there was a sudden shortage of the product
Part 2: Examples of Elasticity
In your own words, please define, describe, and use an example for each of the following terms using a minimum of 50 words each.
• Unitary Elastic
• Perfect Inelasticity
• Income Elasticity of Demand
• Cross Elasticity of Demand