ECONOMICS FOR THE VIRTUAL ENTERPRISE \"T he business of America is business. \" Calvin Coolidge Name: Directions: Complete the questions below in RED text and insert shapes in the graphs complete the activities by hand then scan and upload the documents in this assignment box. Exercise 1: Create a supply schedule Your class has been asked to take part in a pilot program in which students are given the opportunity to work part time, before or after school, in the school library. Students hired can decide for themselves how many hours per week they will work, although no student can work more than 25 hours per week. The librarian is not sure how much money to offer (per hour) to attract enough students to meet the needs of the library so she asks your teacher to conduct a survey of the class by asking students to indicate the number of hours each would be willing to work at different hourly rates. Complete the table below by indicating how many hours you would be willing to work (assuming you would be hired) at the various rates the library is considering offering. Hourly rate # hours you would be willing to work _Exercise 2: Create a supply curve The survey to assess students' willingness to work at the library was distributed to all seniors in the school; the total hours that students are willing to work at the different hourly rates are presented in the supply schedule for part time workers below: _pply Schedule or Part Time Workers Hourly rate # hours seniors are willing to work Using the data in the supply schedule for part time workers, draw the supply curve. Supply of Part Time Workers rate $30IIIIIIIIIIIII| 555IIIIIIIIIIIIII 55IIIIIIIIIIIIII 55IIIII III-II 55IIIII III-II 55 IIIII III-II 55 IIIII III-II 55 IIIIIIIIIIIIII 55 IIIIIIIIIIIIII 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 Quantity of Part Time Workers Supplied In your own words, summarize the information displayed in the graph. Exercise 3: Changes in Supply A Shift in the Demand Curve The supply schedule below presents the results of a survey of seniors only, and seniors and juniors, indicating the number of hours these students would be willing to work in the school libr at different hourl rates of a . Supply Schedule of Student Workers' Hours Hourly rate # hours juniors and willing to work (52) seniors are willing to # hours juniors are willing to work (S 1) 30 25 20 [5 125 080 035 25 500 440 380 100 625 520 415 925 470 wasmHHH 5.: o OatnrnNNNE 4" o o H w A m 3 q M 60 80 _. 4; N c ooc o M El 0 a n: a w Exercise 4: Using the data from the supply schedule for part time workers, draw supply curves 82 and S3 on the graph below. Supply of Part Tune Workers 35 30 25 20 Hourly Rates 15 10 5 0 0 500 1000 15m 2000 2500 3000 Quantity of Pail Time Hours Refer to the chart you have drawn and answer the following _questions: Quantity 01 Pall Tlme Hours Refer to the chart you have drawn and answer the following _questions: 1. When the hourly rate is $20, compare the quantity of hours students are willing to work at supply levels 82 and S3. 2. When supply increases at all price levels, the supply curve shifts in which direction: right or left? 3. Explain the difference between an increase in supply and increase in the quantity supplied. 3. Which is depicted as a movement along the supply curve? b. Which is depicted as a shift in the supply curve? Exercise 5: In the table below, complete the following; 1. Record the affect on supply of each of the four determinants. 2. In each instance, state if the supply curve shifts right or left. 3. In your own words provide an explanation of the suppliers' reactions. Determinant of supply Affect on supply Explanation A change in the price of inputs (raw materials, wages, etc.) An increase in the price of inputs. Increase in the A change in the number of \"\""fbe' of firms in firms in the industry. Technology development Imagine that you have opened a small business in your school selling Italian ices. You make the ices from fresh fruit lemons, oranges, blueberries and cherries - using a family recipe that your grandfather has passed along. You are concerned about the price you pay for the fruit, as the price you pay for the ingredients is reected in the price you charge your customers, and you are aware that there is a limit to what your customers are willing to pay. Although you would like to offer variety to your customers, if the price of any of the fruits becomes too high, you will cut back on your purchases, and offer less of that avor to your customers. The quantity of lemons you are willing to purchase at various prices per bushel is presented in the table below. The lemon supplier obtains lemons directly from growers in Florida and has a variety of customers that include rpcfnnranf: ennprn'mrlnaf: and Fruit vpnrlnrc ECONOMICS FOR THE VIRTUAL ENTERPRISE \"T he business of America is business. \" Calvin Coolidge Name: Directions: Complete the questions below in RED text and insert shapes in the graphs complete the activities by hand then scan and upload the documents in this assignment box. Exercise 1: Create a supply schedule Your class has been asked to take part in a pilot program in which students are given the opportunity to work part time, before or after school, in the school library. Students hired can decide for themselves how many hours per week they will work, although no student can work more than 25 hours per week. The librarian is not sure how much money to offer (per hour) to attract enough students to meet the needs of the library so she asks your teacher to conduct a survey of the class by asking students to indicate the number of hours each would be willing to work at different hourly rates. Complete the table below by indicating how many hours you would be willing to work (assuming you would be hired) at the various rates the library is considering offering. Hourly rate # hours you would be willing to work _Exercise 2: Create a supply curve The survey to assess students' willingness to work at the library was distributed to all seniors in the school; the total hours that students are willing to work at the different hourly rates are presented in the supply schedule for part time workers below: _pply Schedule or Part Time Workers Hourly rate # hours seniors are willing to work \fRefer to the chart you have drawn and answer the following _questions: 1. When the hourly rate is $20, compare the quantity of hours students are willing to work at supply levels 82 and S3. 2. When supply increases at all price levels, the supply curve shifts in which direction: right or left? 3. Explain the difference between an increase in supply and increase in the quantity supplied. a. Which is depicted as a movement along the supply curve? b. Which is depicted as a shift in the supply curve? Exercise 5: In the table below, complete the following; 1. Record the affect on supply of each of the four determinants. 2. In each instance, state if the supply curve shifts right or left. 3. In your own words provide an explanation of the suppliers' reactions. Determinant of supply Affect on supply Explanation A change in the price of inputs (raw materials, wages, etc.) A change in the number of \"\""beT \"f 5m\" in rms in the industry. Imagine that you have opened a small business in your school selling Italian ices. You make the ices from fresh fruit lemons, oranges, blueberries and cherries - using a family recipe that your grandfather has passed along. You are concerned about the price you pay for the fruit, as the price you pay for the ingredients is reected in the price you charge your customers, and you are aware that there is a limit to what your customers are willing to pay. Although you would like to offer variety to your customers, if the price of any of the fruits becomes too high, you will cut back on your purchases, and offer less of that avor to your customers. The quantity of lemons you are willing to purchase at various prices per bushel is presented in the table below. The lemon supplier obtains lemons directly from growers in Florida and has a variety of customers that include restaurants, supermarkets and fruit vendors. The quantity of lemons you , A1,, are willing to purchase and the I 'I1',,.,,m',,,i ,3, Tecmwlogy development -- - Imagine that you have opened a small business in your school selling Italian ices. You make the ices from fresh fruit lemons, oranges, blueberries and cherries - using a family recipe that your grandfather has passed along. You are concerned about the price you pay for the fruit, as the price you pay for the ingredients is reected in the price you charge your customers, and you are aware that there is a limit to what your customers are willing to pay. Although you would like to offer variety to your customers, if the price of any of the fruits becomes too high, you will cut back on your purchases, and offer less of that avor to your customers. The quantity of lemons you are willing to purchase at various prices per bushel is presented in the table below. The lemon supplier obtains lemons directly from growers in Florida and has a variety of customers that include restaurants, supermarkets and fruit vendors. The quantity of lemons you are willing to purchase and the quantity of lemons the supplier is willing to offer at various prices per bushel are presented in the table below: Exercise 6: For each 1m per bushel in the table: - Indicate whether there is a shortage (quantity demanded > quantity supplied) or a surplus (quantizy supplied > quantity demanded) - Indicate the amount of the shortage or surplus. Price per bushel Quantity Quantity supplied Surplus or Amount demanded (D) (S) shortage Messages; Dov'NbJ-A Utah-its.) coco When a surplus exists: 0 Suppliers respond; the lemon supplier has unsold lemons that will soon go bad. 1' If the supplier is willing to offer lemons at a lower price, what happens to the quantity of lemons demanded? 2' What happens to the size of the surplus as suppliers lower the price of lemons? When a shortage exists: 0 Suppliers respond; since the lemon supplier is able to sell all the lemons at the current price, this is a good rucc pm uumim Qumiuly Vuauluy uuppucu Exercise 6: For each prii per bushel in the table: - Indicate whether there is a shortage (quantity demanded > quantity supplied) or a surplus (quantity supplied > quantity demanded) - Indicate the amount of the shortage or surplus. When a surplus exists: 0 Suppliers respond; the lemon supplier has unsold lemons that will soon go bad. 1. If the supplier is willing to offer lemons at a lower price, what happens to the quantity of lemons demanded? 2, What happens to the size of the surplus as suppliers lower the price of lemons? When a shortage exists: 0 Suppliers respond; since the lemon supplier is able to sell all the lemons at the current price, this is a good opportunity to raise prices to increase prots. As long as the quantity demanded is greater than quantity supplied, suppliers can continue to raise prices. 1. What happens to the quantity of lemons demanded as suppliers raise the price? 2. What happens to the size of the shortage when suppliers raise the price? 0 Consumers respond; since at these prices the supply of lemons is less than demand, those who value the lemons the most are willing to pay more if they have to obtain lemons. Everyone does not value lemons equally. Consumers who value lemons the most will be willing to pay more. 1, What happens to the quantity of lemons demanded as the price increases? 2' What happens to the size of the shortage as the price of lemons increases? - At equilibrium (when there is neither a shortage nor a surplus): 0 Supply and demand is in balance, there is no pressure to change. 1, Can you explain why there is no pressure for the equilibrium price to change? 2, Can you think of events that would disturb this equilibrium? Fvnrninn '7- raise the price? 0 Consumers respond; since at these prices the supply of lemons is less than demand, those who value the lemons the most are willing to pay more if they have to obtain lemons. Everyone does not value lemons equally. Consumers who value lemons the most will be willing to pay more. 1, What happens to the quantity of lemons demanded as the price increases? 2. What happens to the size of the shortage as the price of lemons increases? - At equilibrium (when there is neither a shortage nor a surplus): 0 Supply and demand is in balance, there is no pressure to change. 1, Can you explain why there is no pressure for the equilibrium price to change? 2, Can you think of events that would disturb this equilibrium? Exercise 7: Points A, B and C in the chart below depict either a shortage, a surplus or an equilibrium. Indicate what each letter represents in the chart by circling the correct term: A. Shortage, surplus, equilibrium point B. Shortage, surplus, equilibrium point c. Shortage, surplus, equilibrium point Lemon Supply 8. Demand 45 40 35 30 Price per Bushel 0 10 20 30 40 50 60 70 Bushels of Lemons