1) what effect will each of the following have on the demand and/or supply for product B? Make sure you show your answers graphically, label your graphs and curves appropriately, and explain your answers with a brief written description of what is happening and why it’s happening for each scenario (a-e). Show what happens to the market clearing price and quantity. You need to show the interaction between supply and demand curves to answer this question. Use an upward sloping supply curve. a. Product B becomes more fashionable. b. The price of substitute product C falls. c. A decline in the number of firms in industry B occurs. d. Income declines and product B is an inferior good. e. The granting of a 2$ per unit subsidy to producers for each unit of B they produce. Textbook and other reading material: Paul krugman and Robin wells, economics, 4th edition ( New York: worth publishers, 2015) Chapters 3&5 to uderstand more how to make the graphs). 2) Compare and contrast capitalism, socialism, and the mixed economy. Include in your discussion, the essential characteristics of each system. Also include in your response, a discussion of the initiation of physical force and individual rights: what are they and how do they relate to each other and each economic system? Further, based on what has been discussed in this course, what are the relative effects of each system on one’s standard of living ( for example does capitalism create a higher standard of living than socialism or vice versa? What about the mixed economy? And how are these relative effects brought about? ( no more than two pages) the entire assignment ( including graphs) should be completed using world processing software or other appropriate software.
