UNIVERSITY OF MASSACHUSETTS BOSTON Accounting and Finance MBAAF 601 Prof. Konan Managerial Economics Homework # 3 Instructions: Answer all questions below. Make sure to show your work whenever appropriate. TQTAL: 40 points 1. In recent years, fewer households have been relying on traditional cable television to provide entertainment. Traditional cable television is sometimes called \"pay TV." According to an article in the Wall Street Journal. \"The pay-TV decline comes as many US. households are turning to the intemet for entertainment and canceling their traditional subscriptions, a phenomenon called cordcutting." [s the decline in the number ofcable television subscriptions likely the result ofa movement along the demand curve for cable television or a shift in the demand curve? What information would you need to be condent in your answer? According to an article in the Wall Street Journal in early 2019. the price ot'oil produced in the United States had increased by 25 percent since the beginning ofthe year. At the same time, US. oil production was at a record high. a. Are these two facts consistent with a movement along the supply curve for oil? Briefly explain. b. Is it possible that the supply curve for oil also shifted? Suppose you were told that managers at oil firms were convinced that oil prices in the future were going to be significantly lower than they are today. Would this fact help you answer the question? Briefly explain. According to an article in the Wall Street Journal. both the quantity oforganic milk sold and the price per halfgallon have been falling. For each of the following scenarios, briefly explain whether the scenario can account for this outcome. a. The demand for organic milk has been decreasing, while the supply of organic milk has been increasing. b. The demand for organic milk has been increasing, while the supply oforganic milk has been decreasing. c. The demand for organic milk and the supply oforganic milk have both been increasing. d. The demand for organic milk and the supply oforganic milk have both been decreasing. Consider the following demand and supply equations: Q\" =1200 1[)P 05 = 150 +15P Solve for equilibrium quantity and equilibrium price