1)Identify and describe the role of supply and demand and equilibrium in a market economy in terms of efficiency advantages as applied to the problem of scarcity and(course objective 3)Discuss how markets function and what happens in the presence of market failures.

Specifically, you will be able to:

• Explain the four-step-process.
• Draw a supply and demand market diagram and show how changes effect equilibrium price and equilibrium output by shifting either the demand or the supply line.

INSTRUCTIONS

Please see either weeks 1 or 2 note taking instructions for more details on how to take notes and how to submit your notes.

ASSIGNMENT

A. Read Steve's written lecture and take notes using the following as a guide. (Of course you can take more notes than on just these topics. These are here to get you focused on what I think is MOST important.)

1A.Using lecture 1 section 3.3 "Changes in Equilibrium Price and Quantity" the "demand shifts right" and the "demand shifts left" sections as a guide.

Use the kale market example that is given as your guide, and replicate the diagram and the explanations only make the market the corn market.

2A.Using lecture 1 section 3.3 "Changes in Equilibrium Price and Quantity" the "supply shifts right" and the "supply shifts left" sections as a guide.

Use the kale market example that is given as your guide, and replicate the diagram and the explanations only make the market the corn market.

B. Read the textbook and take notes (Of course you can take more notes than on just these topics. These are here to get you focused on what I think is MOST important.)

3B.Using Textbook section 3.3 "Changes in Equilibrium Price and Quantity - the four step process",

explain the four step process.

4B.Using Textbook section 3.3 "Changes in Equilibrium Price and Quantity - the four step process", specifically the "A combined example" section.

Using the US Postal service example, redraw the combined diagram and explain the effect on equilibrium quantity and equilibrium price.

5B.Using Textbook section 3.2 "Shifts in supply and demand", specifically the tables in the sections titled "summing up factors that change demand" and "summing up factors that change supply".

Simply list what shifts the demand line and what shifts the supply line.