Description of the exercise

There are three parts to the assignment.

In the first part, you will either describe a current event occurring in the US using a news article or a work of fiction. The summary of the article must contain at least five complete sentences. In addition, list the title of the article, the name of the media source (or the title of the work of fiction) and the date of publication.

In the second part, you will use the model of supply and demand to analyze the event. This part must describe in detail how the event affects the market using the concepts and terms introduced in class.

For example, if you are analyzing a shift in a demand curve due to change in the price of a substitute, you must describe

• the direction of the shift in the demand curve,
• the initial shortage or overproduction experienced by the market,
• how changes in the price move the market to a new equilibrium price and
• quantity
• The analysis of the event must involve one of the following economic concepts: 1. Ashiftinthesupplycurve
• 2. Ashiftinthedemandcurve
• 3. Pricecontrolsandmismatch
• 4. Taxation
• This second part of the exercise must contain at least five complete sentences.
• In the third part, you will use the concepts and terms related to economic welfare to address how the consumer surplus, producer surplus, tax revenue (if any), and deadweight loss (if any) change as result of the event described in the first part. Describe the increase and decrease in consumer and producer surpluses as well as the change in the total surplus.
• The third part of the exercise must also contain at least five complete sentences.