09 Apr Unit 3 [BU204]Page 1 of 6Unit 3 Assignment: Supply and Demand Mod
Unit 3 [BU204]Page 1 of 6Unit 3 Assignment: Supply and Demand Modeland PPF1. Your Assignment should have a cover sheet with the following information:● Your Name● Course Number● Section Number● Date2. You may submit your Assignment using the Unit 3 Assignment template.3. Your answers should follow APA formatting by being in double-spaced paragraph format, withcitations to your sources and, at the bottom of your last page, a list of references. Your answersshould also be in Standard English with correct spelling, punctuation, grammar, and style.4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,definitions, and other elements asked for in the questions. Your answers should be highlyorganized, logical, and focused.AssignmentAs a marketing specialist working for a production company, it is your job to explain to investors howthe current status of the supply will meet the changing demand for products. Based on the followingAssignment questions compile answers that effectively addresses the hypothetical examplesprovided in the Assignment.This Assignment will assess your knowledge based on the following outcome:BU204-1: Describe the importance of Production Possibility Frontier, the Circular Flow Diagram, andthe Supply and Demand models in the market economy.This Assignment deals with the Production Possibility Frontier and market forces of supply anddemand models as well as the impacts of government policies on the interactions of supply anddemand in the market economy.Unit 3 [AB204]Page 2 of 61) Given the table below, graph the demand and supply curves for flashlights. Make certain to labelthe equilibrium price and equilibrium quantity.Price Quantity Demanded PerMonthQuantity Supplied PerMonth$5 6,000 10,000$4 8,000 8,000$3 10,000 6,000$2 12,000 4,000$1 14,000 2,000a. What are the equilibrium price and the equilibrium quantity?b. Suppose the price is currently $5. Explain what problem would exist in the marketand calculate the size of that problem. What would you expect to happen to price?c. Suppose the price is currently $2. Explain what problem would exist in the marketand calculate the size of the problem. What would you expect to happen to price?2) Consider supply and demand for Maine lobsters indicated in the following tables to answerquestions from a–e below. Suppose that the supply schedule of Maine lobsters is as follows:Price of Lobster perPoundMaine Quantity of LobsterSupplied (pounds)$25 800$20 700$15 600$10 500$5 400First, assume that Maine lobsters can be sold only in the United States. The U.S. demand schedulefor Maine lobsters is as follows:Price of Lobster perPoundUSA Quantity of Lobster Demanded(pounds)$25 200$20 400Unit 3 [AB204]Page 3 of 6Price of Lobster perPoundUSA Quantity of Lobster Demanded(pounds)$15 600$10 800$5 1,000a. Looking at both the schedules of supply and demand, as well as the graph of thedemand and supply curve for Maine Lobsters, what is the equilibrium price of lobstersand the equilibrium quantity of lobsters demanded and supplied at that price?b. Second, suppose that Maine lobsters can also be sold in France. The French demandschedule for Maine lobsters is as follows:Price of Lobster perPoundQuantity of Lobster Demanded(pounds)$25 100$20 300$15 500$10 700$5 900c. What is the demand schedule for Maine lobsters now that French consumers canalso buy them?d. Using the combined U.S. and French demand schedule, the U.S. demand scheduleand the supply schedule, and the graph below, analyze the change in the market forlobsters. What will happen to the price at which fishermen can sell lobster? What will bethe final output of lobsters?e. What will happen to the price paid by U.S. consumers? What will happen to thequantity consumed by U.S. consumers?3) Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catchfresh fish. The accompanying table shows the maximum annual output combinations of potatoes andfish that can be produced. Obviously, given their limited resources and available technology, as theyuse more of their resources for potato production, there are fewer resources available for catchingfish.Unit 3 [AB204]Page 4 of 6Year Quantity of Potatoes(Pounds)Quantity of Fish (Pounds)A 1,000 0B 800 300C 600 500D 400 600E 200 650F 0 675Examine the Maximum annual output options table above and the resulting Production PossibilityFrontier Graph below and answer questions from a-e.a. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes?Explain.b. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800pounds?c. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400pounds?Unit 3 [AB204]Page 5 of 6d. Can you explain why the answers to parts b and c are not thesame?e.What does this imply about the slope of the production possibilityfrontier?4) Now that you have segmented the components of the changes in supply and demand and theability to meet demand, explain how the current status of the supply will meet the changing demandfor the products, and the change in the production possibilities will be able to meet the marketdemand.Directions for Submitting Your AssignmentBefore you submit your Assignment, you should save your work on your computer in a location andwith a name that you will remember. Make sure your Assignment is in the appropriate templateprovided. Then, when you are ready, you may submit to the Dropbox.Unit 3 Assignment: Supply and Demand Model and PPF PointsPossiblePointsEarnedContent and AnalysisProblem #1Correctly explained the equilibrium values. 5Correctly explained the excess demand. 5Correctly explained excess supply. 5Problem #2Correctly identified equilibrium price and quantity. 5Provided a demand schedule for the combined demand of U.S. andFrench consumers.5Identified the new market price and quantity supplied. 5Identified the new price U.S. consumers pay and the new quantitydemanded.5Problem #3Identified the infeasible production. (“a”) 5Correctly calculate the opportunity cost. (“b”) 5Correctly calculate the opportunity cost. (“c”) 5Explained the differences in opportunity costs. (“d”) 5Explained the slope of PPF. (“e”) 5Unit 3 [AB204]Page 6 of 6Unit 3 Assignment: Supply and Demand Model and PPF PointsPossiblePointsEarnedProblem #4Explained how changes in the production possibilities (supply) meet thechange in the market demand.10Writing style, grammar, and APA formatting. 5Total 75
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