Assignment 4.1

Introduction

There are two parts in this assignment. You will need to develop one graph in Part I and a series of graphs for Part II.

Part I: Demand and Supply Curves

Table 4.1 represents supply and demand for a piece of medical equipment.

1. On the same graph, show the demand curve and supply curve for this piece of medical equipment.
2. Identify where the market equilibrium is on the graph.
3. State the P_e and Q_e for this piece of medical equipment.

Part II: Changing P_e and Q_e

For this part of the assignment, you do not use the numbers provided for Part I. For each of the following situations, create a graph of equilibrium in a market. Then, graphically show how each curve will shift. Indicate the direction in which each shift will occur. Finally, show how the P_e and Q_e are affected by each situation.

1. A good is a normal good and income increases.
2. Consumers expect the price of a good to be lower in the future.
3. There is a decrease in resource prices.
4. There is a decrease in the number of existing suppliers.

Table 4.1

Price	Quantity Demanded	Quantity Supplied
400	90	10
800	80	20
1200	70	30
1600	60	40
2000	50	50
2400	40	60
2800	30	70
3200	20	80