Describe graphically and algebraically with minimal (but necessary) discussion how the demand…

1) Describe graphically and algebraically with minimal (but necessary) discussion how the demand function and

the inverse demand function relate to the two ways of defining a demand curve, as well as a change in demand.

2) Describe graphically and algebraically with minimal (but necessary) discussion how the supply function and the

inverse supply function relate to the two ways of defining a supply curve, as well as a change in supply.

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3) Suppose there is an increase in the marginal cost of production for firms in a perfectly competitive industry.

Describe graphically with minimal (but necessary) discussion the impact this has on the market in terms of change

in equilibrium price and quantity. Outline the process of movement from one equilibrium to the next.

4) We define two goods as complements using the definition that “A is a complement to B if an increase in the

price of A leads to a decrease in the demand for B.” What is the important “ceteris paribus” assumption that is

necessary for this definition to be accurate?

5) Using a graphical analysis with minimal discussion, in what sense is an increase in a binding minimum wage

argued to be good for some, but not good for all minimum wage workers? In what sense does your answer to this

question depend on whether the time frame under consideration is soon versus later?

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