Eco/365 Week 2 Assignment

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Eco/365 Week 2 Assignment

By | June 2013
Page 1 of 2
Week 2 Assignment

Topic| Answer|
What factor caused movement along the supply curve in the simulation?| By decreasing the availability of the units to 28%, there was a surplus of 550 units available. | Please include the graph of a movement along the supply curve. Refer to our textbook please.| | What factor caused shift of the supply curve in the simulation?| The higher the price of the rental unit, the more the supply increased. This caused a movement along the supply line to curve upwards.| Please include the graph of a shift in the supply curve. Refer to our textbook please.| | What factor caused movement along the demand curve in the simulation?| The increase in demand is more than the quantity supplied. This was caused by another company moving into the area.| Please include the graph of a movement along the demand curve. Refer to our textbook please.| | What factor caused a shift of the demand curve in the simulation?| As more people began to earn more money, there focus went to buying detached homes in the area instead of renting an apartment| Please include the graph of a shift in the demand curve. Refer to our textbook please.| | Key point #1 emphasized in the simulation | The demand curve is downward sloping, and demand increases as the price decreases. The supply curve is upward moving, and supply increase with price| Key point #2 emphasized in the simulation| Equilibrium – quantity demanded equals quantity supplied| Key point #3 emphasized in the simulation| Supply and demand are not static. Various factors cause them to move upward or downward along the curve| Key point #4 emphasized in the simulation| Price ceiling - quantity demanded exceeds producers’ quantity supplied. In this type of scenario, non-price methods such as rationing the limited supply of two-bedrooms may become a factor.| How is price elasticity of demand used in decision making by firms. Look at pp. 166-167 in textbook.Include an...