Homework assignment #2 1. (5 points) Given the market for domestic soybeans, illustrate (that means graph!) how the following events would affect the supply or demand for soybeans. Which non-price determinant caused the shift of demand or supply? What happens to price and quantity after the change? You can graph these in paint, excel, or you can hand draw and take a picture of the graph, save as a jpg and paste into your document. a. The price of wheat (a substitute for soybeans) goes down significantly. b. The surgeon General issues a statement that eating soybeans will extend life. c. There is a agricultural workers labor strike and half of the soybean workers walk off the job. d. There is a large tax decrease that affects American consumers (assume that soybeans is a normal good). e. The price fertilizer decreases creases significantly. 2. (3 points) What are the pros and cons of rent control? Should it be abolished? Defend your answer in an essay and use a graph. 3. (2 points) Circular Flow of Economic Activity: Circular flow Firms goods & services money production Market for goods & services Market for factors of production goods & factors of andcon Households Given the graph above, explain who owns the factors of production in a Capitalistic society and for what are the factors of production traded. Be specific. How does the government fit into the circular flow?