Question 4 a. Suppose the demand for shoes is given by Qd = 40 - 5P and the supply for shoes is given by Qs = 10P-20, where P = price (per shoes). i. ii. iii. iv. Graph the supply and demand schedules for shoes. What is the equilibrium price and equilibrium quantity using the equations provided?' What would happen if suppliers set the price of shoes at $8? Illustrate this problem Explain the market adjustment process of the problem in part (iii) ' b. Identify the flaw in this analysis: "If more Trinidadians go on a vegan diet, the demand for beef will fall. The decrease in the demand for beef will cause the price of beef to fall. The lower price, however, will then increase the demand. In the new equilibrium, Trinidadians might end up consuming more beef than they did initially." " Question 5 a. Assume that Sophia has $1000 per month to spend between dinners at a Thai restaurant and evenings at MECA, a local club. Assume that going to MECA costs $200 and eating at the Thai restaurant costs $100. i. ii. iii. Draw Sophia's budget constraint. Restaurants on the Y axis. Assume that Sophia's income rises and she can now spend $2000 per month. Draw her new budget constraint in relation to the old. Suppose the price of evenings at MECA increase to $1200, while Sophia's income and the price of the Thai restaurant is unchanged from part (i). Illustrate the new budget line in relation to the old money b. Jody has $360 to spend on her summer vacation. She decided to use the on trips to the zoo and on tickets to the movies. Her original budget constraint is shown below. Let X represent movie tickets and Y represent trips to the zoo. What is the equation of the original budget constraint? What is the price of a movie ticket? a trip to the zoo? i. ii. iii. iv. Assume a price change occurs and Jody now face the new budget constraint. What is the equation of the new budget constraint? With the new budget constraint, what is the price of an amusement park ticket? a baseball ticket? Zoo (y) 20 15 10 5 0 8 New budget constraint 12 12 Original budget constraint movies (x) 16 20