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1.) Produce the following: three (3) original, separate, hypothetical models … [1]
a) Production Possibilities Curve
b) Production Function + Equation
c) Indifference Curves + Budget Constraint (between two goods/activities, etc.)
Be sure to label each axis, curve, etc. For each model give a brief narrative discussion of the overall “logic” of the model, the choices or tradeoffs being made. Be specific and explain. For each model, show movements of the curve(s) and explain what it represents. Lastly, briefly critically comment on the realism of each of the models using the insights from political economy.
2.) Supply and Demand:
a) Construct a demand curve and demand schedule for a particular good or service that you actually buy (want to buy). Use the logic and assumptions of the mainstream supply and demand model to give a narrative account or explanation of your demand for the good at different prices and quantities.
b) Now, construct a supply curve and supply schedule for the good or service above (a). Use the logic and assumptions of the mainstream supply and demand model to give a narrative account or explanation of the supply price and quantity for the good or service at different prices and quantities.
c) Connect the demand and supply curves above (a, b), showing the equilibrium price and quantity.
d) Use the determinants of demand to show two (2) different hypothetical shifts of the demand curve, pointing out the new equilibrium point.
e) Use the determinants of supply to show two (2) different hypothetical shifts of the supply curve, pointing out the new equilibrium point.
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