You are provided with two questions. Question 1 requires calculating surplus and shortages when provided with demand and supply of labor. Calculate your answers and show your workings. Question 2 also provides you with demand and supply of Nutella chocolate spread and you are asked to calculate price elasticity of demand and supply. Show your calculations here too. For the mathematical portion, it is important to show your working (calculations) clearly as well as the formulas used for a chance at full credit. The use of paper work or excel is encouraged (If using excel, provide answers that were worked with Excel formulas). Do not put off this assignment until the last moment.
Below is the homework. It is also provided as an Excel file for your convenience (at the end of this page).
HOMEWORK 1 (40 POINTS)
Question 1: The table below shows the quantity of workers demanded and supplied in Los Angeles over the past 3 months. Use the table to answer question A-C.
Quantity Demand and Supply of workers in Los Angeles
Annual Salary ($)
Quantity Demanded
Quantity Supplied
Surplus/Shortage quantity
10,000
60,000
1,000
20,000
55,000
5,000
30,000
50,000
5,000
40,000
45,000
13,000
50,000
40,000
15,000
100,000
20,000
20,000
120,000
11,000
30,000
200,000
8,000
35,000
250,000
5,000
40,000
300,000
1,000
45,000
400,000
500
50,000
Fill in the table above (Surplus or shortage quantity). In order to get points, showing workings [Show how the answer was derived for each row]. Simply adding the formula above or below the table is insufficient. Calculations can be provided using Microsoft word, paper, or Excel/Google Sheet. (8 points)
Provide a graph representing the table above. Show the equilibrium quantity and salary. (4 points)
Does this table follow the law of demand and supply? Explain (4 points)
Question 2: Below is a table showing the price of Nutella Chocolate spread and quantity sold at a local store. Use table below to answer questions A-E
Quantity Demand and Supply of Nutella Chocolate spread in a local store
Quantity Demand and Supply of Nutella Chocolate spread in a local store
Price ($)
Quantity Demanded
Quantity Supplied
5
30
4
6
28
6
7
26
10
8
22
14
9
18
18
10
14
22
11
10
28
12
5
30
Use the midpoint method for elasticity to solve questions A-B
Calculate the price elasticity of demand as price moves from $6 to $7 above (8points)
Calculate the price elasticity of supply as price moves from $11 to $12 above (8points)
From question A above, is the price elasticity elastic, inelastic or unitary? (2.5 points)
From question B above, is the price elasticity elastic, inelastic or unitary? (2.5 points)
Graph the table above (3 points). This can be done using paper and pencil, scanned and uploaded in canvas or using Excel.
To get full points, show your workings (calculations) for A and B and explain your answers for C-D