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Economics

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1.Supply and demand curves So and Do represent the original situation in the market for top quality Brahma bulls. Use information from the figure to answer these questions about this market. The Brahma Bull Market So P3 Price S Do 0 Quantity e. The movement from point a to point c represents what on the demand side? What on the supply side? f. The movement from point a to point b represents what on the demand side? What on the supply side? g. The movement from point b to point d represents what on the demand side? What on the supply side? h. The movement from point c to point d represents what on the demand side? What on the supply side? i. Looking only at the original set of demand and supply curves (Do, So), what would occur if the price were set at P2? Why? j. Looking only at the new set of demand and supply curves (D1, S1) what would occur if the price were set at P ? Why?

2.Supply and demand curves So and Do represent the original situation in the market for top quality Brahma bulls. Use information from the figure to answer these questions about this market. What is the original equilibrium price? The Brahma Bull Market Quantity? So b. If demand moves to D, because dietitians recommend that all people over 40 become P3 vegetarians, what is the new equilibrium price? Quantity? Price S Beginning with the original curves, if supply shifts to S, with the introduction of beef-up antibiotics, what is the new market-clearing price? Quantity? Do 0 d. Assuming simultaneous shifts to Di and Si what is the new equilibrium price? Quantity? Quantity

3.Carefully explain the effect of an increase in the income tax rate on the equilibrium GDP in the Keynesian income-expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium.