Instructions: This midterm Assignment is to be done by yourself. You may not work with anyone else, but you may ask the professor, Gabriella Bucci, any questions you wish about it. You must submit this test in PDF format only. You may draw your graphs by hand then take photos of the graphs and insert them into your document There are two questions on this assessment. If you use anything other than the class materials (e.g. if you find something online and use it), you must cite your sources appropriately and include a works cited list at the end of the 1. ( 50 points total. 10 points per part. Page limit maximum 3 pages for the entire question. Graphs are required and must be original graphs drawn by you. The graphs are part of the page limit.) Draw Supply and Demand Curves for each of the following cases. In each problem be sure to clearly label the axes, curves, and equilibrium points. Please follow the same process I use in the slides and lectures in weeks 3 and 4. In each case briefly explain in words what happens and why. a. (i) Suppose there is a tax on producers of sugary cereal. Which curve shifts as a result of this tax? Draw a Supply and Demand graph. Show and explain the curve shift. Label the initial equilibrium price and quantity and the new price and quantity on the same graph. (ii) Suppose the demand for sugary cereal is elastic. Based on the price change you see in (i) what will happen to revenues for sugary cereal sellers? Explain. b. Consumer incomes have increased since the pandemic. Draw a supply and demand graph for restaurant meals. Which curve shifts? Show and explain the shift on your graph and label the original price and quantity as well as the new price and quantity on the same graph. c. Artificial Intelligence has reduced production costs across many industries including grocery stores. Draw a supply and demand graph for groceries. Show and explain which curve shifts as a result of the AI. Label the initial and final P and Q on the same graph. Make sure to label all the equilibrium points. d. The rise of electric vehicles (EVs) has increased the demand for Lithium Ion batteries and other raw materials used in their production. Draw a supply and demand curve for Lithium (not for EVs). Show and explain which curve shifts. Label the equilibrium points. e. Computer Chip manufacturing has become less expensive in the last 5 years. At the same time, consumers are purchasing more and more electronics and computers that contain chips. Draw a supply and demand graph for computer chips and show which curve or curves shift. Label your original and final curves clearly and label the equilbrium points. 2. (50 points, limit 1.5 pages, single-space, 12 point font. You do not have to use the entire page allowance) Describe an important decision you made in the last month related to school or a course you are taking. (The decision cannot be one from the Discussion Boards) Think about what motivated your decision. Explain whether your choice was driven by rational maximization of your own utility or by something else that motivated you or influenced your choice? You must use all the following concepts from class as part of your description: - benefit, cost, opportunity cost, tradeoff, scarcity, preferences -include any other relevant concept we have covered and explain the motivation. -Explicitly tie your description to at least two required readings/multimedia, and use intext cites to show clearly where the quotes come from. Question 2 will be graded on the following criteria: (a) Choice of Decision/behavior (b) How well you explain the decision using the required economic concepts (c) How well you incorporate other relevant concepts (c) Your understanding of the rational decision framework or other framework (d) Your use of readings, multimedia, in your explanation