ECO" 2301: PRINCIPLES OF MAGDECONGMIES SUMMER 2022 Extra Credit Assignment Math Extra Credit IALL or nothing for 10 aims! Answer ALL of the questions below. Submit your typed answers in a document here to the Extra Credit Assignment in Required Content. You can earn a full 1121 points extra credit for the entire assignment completed. and 30% or more of the answers correct. SUPPL'l' AN D DEMAND See the below demand schedule showing the willingness of Sandra and Dare to buy ice cream cones at different price levels: 1. Who likes ice cream more. Sandra or Dave and why? 2. Graph Sandra's demand curve. 3. Graph Dave's demand curve. 4. Assume that Dave and Sandra are the only people who bw ice cream cones. Input below the market demand schedule: 5. Graph the market demand curve. 6. Find the slope of the market demand where: Slope [m] :I: change in. price chmge in quantity 1 Find the intercept of the market demand by plugging in points to the below: Page 5 of8 ECON 2301: PRINCIPLES OF MACROECONOMICS SUMMER 2022 Extra Credit Assignment QD = quantity intercept - slope * P 8. Write the equation for market demand using the format from 7. 9. Assume Sandra got a raise, and now has more money to spend. a. Input data in the table below that would be consistent with this ice cream being an inferior good. Price of one ice cream cone # of ice cream cones Sandra would buy at this price $1.00 $1.50 $3.00 $4.00 b. Create a graph showing the shift in Sandra's demand curve based on your completed chart from question 9a. c. What would be the new market demand curve based on your completed chart from question 9a? Price of one ice cream cone (P) Market Demand (Quantity demanded, QD) $1.00 $1.50 $3.00 $4.00 d. Create a graph showing the shift in market demand curve based on your completed chart from question 9d. 10. Resetting from question 9- assume that Sandra got a raise. a. Input data in the table below that would be consistent with this ice cream being an normal good. Price of one ice cream cone # of ice cream cones Sandra would buy at this price $1.00 $1.50 $3.00 $4.00 Page 6 of 8ECON 2301: PRINCIPLES OF MACROECONOMICS SUMMER 2022 Extra Credit Assignment b. Create a graph showing the shift in Sandra's demand curve based on your completed chart from question 10a. c. What would be the new market demand curve based on your completed chart from question 10a? Price of one ice cream cone (P) Market Demand (Quantity demanded, QD) $1.00 $1.50 $3.00 $4.00 d. Create a graph showing the shift in market demand curve based on your completed chart from question 10d. 11. Go back to the original demand curve that you wrote in question 8. Assume market supply is given by the following equation: Qs = 2P + 3 a. Calculate market equilibrium where Qs = Qp. What is the equilibrium price? b. What is the equilibrium quantity? RESERVE BANKING 12. Assume that the reserve ratio is 10%. How much money will be created in the economy from an injection of $1 million from the Federal reserve. 13. Now assume that the reserve ratio is 2%. How much money will be created in the economy from an injection of $1 million from the Federal reserve. FISCAL POLICY 14. The world is in a global recession. The governments of the US and Japan have decided to provide a tax stimulus package worth $1 million to their respective citizens. So, each citizen is paying less taxes and has a bigger budget as a result. Page 7 of 8ECON 2301: PRINCIPLES OF MACROECONOMICS SUMMER 2022 Extra Credit Assignment a. Assume that the US population saves on average 5%. What is the US marginal propensity to consumer b. Calculate the potential boost to US consumer spending of the $1 million using the spending multiplier. Assume that the Japanese population saves on average 10%. What is the Japanese marginal propensity to consume? d. Calculate the potential boost to Japanese consumer spending of the $1 million using the spending multiplier. Page 8 of 8