Unit II Homework

1.)   (Evolution of the household) Determine whether each of the following would increase or decrease the opportunity cost for mothers who choose not to work outside the home.EXPLAIN YOUR ANSWER 

 a. Higher levels of education for women. Increase, because with an education woman can learn to run their own business from their homes.

 b. Higher unemployment rates for women. Increase, because women who run their business form home are not likely to be laid off due to their self-employment. 

c. Higher average pay levels for women. Decrease, because higher pay levels entice women to seek a career or job outside the home. 

d. Lower demand for labor in industries that traditionally employ large numbers of women. Increase, because women can use the skills and knowledge they gained from working in an industry to start their own business from home.

 2.)Suppose taxes are related to income as follows:

 Income Tax 

$1000    $200 

$2000     $350

 $3000    $450 

a. What percentage of income is paid at each level?

 b. Is the tax rate progressive, proportional, or regressive? 

c. What is the marginal tax rate on the first $1000 of income? The second $1000? 

3.) ( Substitutes and Complements ) For each of the following pairs of goods, determine whether the goods are substitutes, complements, or unrelated:

 a. Peanut butter and jelly- Complements 

b. Private and public transportation- Substitutes 

c. Coke and Pepsi- Substitutes

d.Alarm clocks and automobiles

e. Golf clubs and golf balls

4.)(Demand Shifter) List five 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.)Why is a firm willing and able to increase the quantity supplied as the product price increases? 

6.)What is the law of supply? Give an example of how you have observed the law of supply at work. What is the relationship of the law of supply and the supply curve?

7.)Assume the market for corn is depicted as in the table that appears below. 

a. Complete the table below. 

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 BushelQuantity Demanded Quantity Supplied Surplus/ Shortage price rise/fall? 

(millions of bushels)(millions of bushels)

$1.80320200? ? 

2.00300230? ? 

2.20270270? ?

2.40230300? ? 

2.60200330? ? 

2.80180350? ? Your completed Homework assignment should be at least three to four pages in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. All references and citations used must be in APA style.