1. The table below shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union. Wage Per Hour Quantity Of Workers Demanded Quantity of Workers Supplied $14 700 300 $16 500 350 $18 400 400 $20 300 450 What would the equilibrium wage and quantity be in this market if no union existed? 2. Using the same information from question 1, assume that the union has enough negotiating power to raise the wage to $2 per hour higher than it would otherwise be. How much is the excess supply of labor? 3. Using the same information from question 1, now assume that instead of a union, the government mandates a work program to receive government benefits. 700 workers show up for work. What is the new wage per hour? 4. Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual coupon payment of $150. What is the interest rate the Ford is paying on the borrowed funds? 5. How much money do you have to put into a bank account that pays 10% interest compounded annually to have $10,000 in ten years? 6. 1. Analyze economic data and indicators a. Interpret economic graphs b. Graph supply and demand c. Apply graphical information Questions Answer both of the following questions. 1. Using the data in the table below, explain the equilibrium quantity and equilibrium price for widgets. Draw a graph to show equilibrium price and output. (10 points) Price (dollars per widget) Quantity demanded (thousands) Quantity supplied (thousands) 150 20 100 125 45 85 100 70 70 75 85 45 50 100 20 2. The graph below illustrates the market for computers, which are normal goods. If the income of computer buyers falls at the same time a tariff is placed on imported parts used to make computers, how will equilibrium price and output in the market for computers be affected? Show the effect of these changes on the graph. (10 points) Instructions There are two components to answering each question: (a) provide an explanation; and (b) draw a graph. You should familiarize yourself with the assessment rubric (below) so that you understand the required scope of your answers. Resources Question 1: See Greenlaw & Shapiro (2nd ed. 2018), pp. 50-51. Question 2: See Greenlaw & Shapiro (2nd ed. 2018), pp. 64-67. There are several free graphing tools to create what you need: Online Chart Tool Chart Go The math worksheet site Create a chart from start to finish Create a graph Helpful YouTube Videos Assessment Each of your answers will be assessed using the following rubric: Assessment Criteria Points Available Explanation The explanation exhibits a clear understanding of the material and addresses the question coherently. The explanation connects theoretical perspectives to the examples and uses technical vocabulary correctly. The explanation is substantive, cites the course text and other academic sources, and includes sufficient references in APA format. The discussion exhibits sound communication skills (grammar, punctuation, and spelling are correct). 10 Graph The graph is constructed correctly and all parts of the graph are labelled accurately. The graph illustrates the answer correctly. 11. Imagine that you own your own business. How would price elasticity of demand impact the pricing decisions of your business? What are the determinants of price elasticity of demand? Identify at least three examples. Research online and share an example of a company that experienced a change in revenue as the result of a change in the price of the good or service they provided. Still on the same company, explain which determinants of price elasticity of demand could be the cause of the change in demand. 12. 1. How does a change in interest rate affect your decision to spend or save? 2. How would a change in the interest rate affect a firm's decision to invest or save? 3. How might an increase in the wage rate affect what you do with your time? 4. Now, describe a tradeoff you've made in terms of time or income.