Using your understanding of supply, demand, and price, answer the following questions.  Try to be brief with each.

 

1. Why has college become so expensive? (Hint: Tell me about WHAT has driven up the demand for college)

 

2. Will we run out of oil one day? (Hint: Tell me about what a declining supply of oil does to the price and then, what that price does to the demand for oil)

 

3. Why is there traffic? (Hint: tell me about what the price to drive "freeways" does to the demand to drive on them OR what the price to build "freeways" does to the supply of "freeways" OR what the supply of homes near one's job does to the demand to use "freeways")

 

4. What happens to the wages of low-skilled workers when you add more low-skilled workers to the labor market? (Hint: tell me about what an increase in supply does to price)

 

These are basic relationships of supply and demand that you should immediately understand based on High School curriculum requirements of the State of California Education Code.  However, the government and its "codes" don't always reflect reality so just do your best here.  Your answers to these questions will help me gauge whether or not your high school economics course had any value or not.

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