1. identify the determinant of demand or supply that has changed (something like the # of firms has decreased).

Show on the graph how the given situation affects the market for the specific good by shifting either supply, demand or both.

Label the new equilibrium price and quantity on the graph as P 2 & Q2 and list how both the equilibrium price and quantity change (increase/decrease, etc.) as the result of this change in the space provided.

If you do not think there is a shift, then determine what has changed and how this impacts the market.

We are creating huge subsidies in our tax code for capital and encouraging employers to use machines instead of labor said Daron Acemoglu, an MIT economics professor. The bill includes a provision called"Full and Immediate Expensing" that allows a company to deduct the cost of any new asset right away instead of when it sells the asset or as deductions depreciate over time. That means a company can take out a cheap loan, use it to purchase an expensive machine, and write it off immediately. Some economists argue that this could spur companies to favor automation over jobs and to invest in robots over people. For example, if an employer had the option of hiring a worker and paying her $1 million over 10 years or buying a $1 million machine that will perform the same task, the machine ends up being cheaper because of the tax incentive."

How does this change affect the market for labor?

What determinant of demand or supply changed?

What is the equilibrium price and equilibrium quality?