ECON 213 Module/Week 2 PROBLEM SET 1

Problem Set 1 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 2.1. Based on the information provided for the market for video games, answer the following questions.PRICE$50$45$40$35$30QDEMANDED5791113QSUPPLIED97531a.) Draw and properly label the demand and supply graphs (this means you must label the axes and anylines you include on the graph).b.) What is the equilibrium price and quantity?a.)b.) PRICE: ______________________QUANTITY: ______________________Now, assume that a new government report claims that video game play stimulates the brain.c.) What will this do to the demand curve? Of the available list of things in the text that causes a changein demand, which best fits here as the cause of the demand shift?d.) What will happen to the equilibrium price and quantity?c.)d.) P: _______________________Q: _______________________Page 1 of 4ECON 2132. Based on the following information for the state of Montana,a. Draw the Production Possibilities Curve.b. Determine the opportunity costs for a move from A to B; B to C; and C to D.CHOICEABCDOIL / barrels5000450025000WHEAT / bushels0100002000025000a.)b.) A to B: _____________B to C: __________________ C to D: _________________Page 2 of 4ECON 2133. In the space provided you are to do a number of things:a. Draw and properly label a demand and supply curve.b. Indicate where the equilibrium Price and Quantities are located.c. How do things change based on the following scenario?The market for hybrid cars is changing. There are more providers butdue to bad publicity and poor performance, demand is falling.Knowing this information, you need to first tell me, and then show this in your graph:1.) What is the market you are dealing with?2.) Which curve(s) change and based on the lists in the text of what causes demand and supply toshift what are the causes of theses shifts?3.) In what direction do they change?What happens to the equilibrium price and quantity after these changes are put into effect? Do they go up,down or stay the same?P: _______________________Q: _______________________Page 3 of 4ECON 2134. Using the following information for individuals and their willingness to pay for a bottle of ginger ale,calculate the total consumer surplus at a market price of $5.ScottDennisGregDaveMikeMaximum amount a buyer wouldpay for ginger ale$10$4$8$7$5Using the information below about willingness to supply ginger ale, calculate the total producer surplus ata market price of $5.Marginal cost of producingginger aleGene$6Brandon$3Matt$2Cooper$11Jed$5How do your answers change if the price falls to $2?