Find article from any news source (you don’t need to copy it) on one of the following markets. Copy one sentence that shows a change in the market that is not itself a change in either price or quantity. Then based on that change make a prediction about what will happen in the market. Will there be a shift in demand or supply and which direction? Will price rise or fall, why? Will quantity rise or fall, why?
- retail gasoline
- a stock on the stock market
- the US dollar traded for other currencies
- coffee beans
- restaurant workers
2. Back when we were on campus you probably saw signs posted by students trying to sell their used textbooks. But this market didn’t work very well. There were surpluses—students couldn’t sell their books—and shortages—students couldn’t buy the used book they wanted. As result the market didn’t “clear,” that is it didn’t move to an equilibrium.
Remember that markets clear and we can use the supply/demand diagram when:
- There is good information
- There are flexible prices
- There are identical products
- There are many buyers and many sellers
In the GCC used book market which of these conditions don’t hold?
What could be done to make the market work better?
3. The stock market is a market with market clearing. As a result, we can use the supply/demand diagram analysis to make predictions. For each of the following situations for the corporation’s stock (not the corporation’s good or service) , describe what you expect to happen to the supply curve, to the demand curve, and to the stock price.–and why those shifts will occur. You don’t need to draw the diagram, just describe what will happen, nor do you need to do additional research on the topic.
A. Facebook faces stronger anti-trust action from European governments
B. School districts announce they will continue to use Zoom after the pandemic is over.
C. Amazon workers succeed in forming a union at the distribution centers.
4. Based on the behavioral economics warmup and video you watched, choose one of the following problems and explain what will be the best way to solve this problem using an idea from behavioral economics. Explain why this solution will work
- Your young child (or sibling) doesn’t like to read books
- The workers you supervise are coming in late to work
- Students at the college are waiting too long to take the math courses they need to transfer
- Employees at your business are not starting early enough to save for retirement
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