Economics Homework Help

There are two graphs, depicting two markets: (1) market for full-service restaurants, (2) market for take out restaurants. Our goal is to analyze, using what you have learned, the effect of this new health regulation on the two markets.

You have to address the questions in order, starting with the market for full service restaurants.

1. Label clearly the supply and demand curves, S and D. (10%)

2. In the text, indicate clearly what side of the market is affected, supply or demand, by underlining or circling the relevant term. (20%)

3. In the text, indicate clearly by filling in the space provided the reason for the change and/or the connection between the markets (why does the change in the price or quantity of one good affect demand or supply of another good; for example, the goods are substitutes in consumption, or one good is an input in the production of the other, etc.) (20%)

4. Once you decided which side of the market is affected and how, show on the graph the new supply or demand curve, labeling them S’ or D’, and indicate the new equilibrium price and quantity, pe’ and qe’. (30%)

5. In the text, fill-in the blank spaces with upward/downward pointing arrows to indicate what happens with equilibrium price and quantity. (20%)

Continue with the next market.