ASSIGNMENT #2 ECON 1220 – Lumber and sawdust are
ASSIGNMENT
#2
This
assignment is due at the beginning of class
on Tuesday 31 May 2016. A 20%
deduction will be made for assignments handed in after this time. Another 80% deduction will be made for
assignments handed in after the beginning of class on Thursday 2 June 2016 (ie
your mark will be zero).
Please
submit a hard copy of your assignment. I
recommend that you type your assignment using word processing software so that
you can retain a copy of your assignment and so you can check your assignment
for spelling and grammar.
While
you are encouraged to discuss the questions with your classmates, you must
write the assignment on your own and use your own words. Do not
share your answers.
This
assignment covers materials from Chapter 3.
You will find this assignment easier to do after you’ve read Chapter 3 of the textbook, reviewed Chapter 3
Overheads, completed MyEconLab
Chapter 3 Assignment and the recommended Study
Guide questions.
Use
your own words and complete sentences wherever a written explanation is
required; do not plagiarize.
Choose
the correct answer for multiple choice questions 1 to 8 using information found
in or implied by the article, “B.C.’s
New In-demand Commodity is … Sawdust.” (see .canada.com/vancouversun/news/business/story.html?id=35a4e55d-86ee-4ddf-a4d6-908791c66366″>http://www.canada.com/vancouversun/news/business/story.html?id=35a4e55d-86ee-4ddf-a4d6-908791c66366. Each of these questions is worth 1 ½ marks. Explanations are not required and will not be
marked.
1. Lumber and sawdust are
a) substitutes in consumption. d) substitutes
in production.
b) complements in consumption. e) complements
in production.
c) not substitutes or complements in consumption or
production.
2. Natural gas and sawdust are
a) substitutes in consumption. d) substitutes
in production.
b) complements in consumption. e) complements
in production.
c) not substitutes or complements in consumption or
production.
3. Wood pellets and sawdust are
a) substitutes in consumption. d) substitutes
in production.
b) complements in consumption. e) complements
in production.
c) not substitutes or complements in consumption or
production.
4. Blueberries and sawdust are
a) substitutes in consumption. d) substitutes
in production.
b) complements in consumption. e) complements
in production.
c) not substitutes or complements in consumption or
production.
5. The slump in the US housing market caused the
________ lumber to ________.
a) demand for; decrease c) supply of; decrease
b) demand for; increase d) supply of; increase
6. The slump in the US housing market caused the
________ sawdust to ________.
a) demand for; decrease c) supply of; decrease
b) demand for; increase d) supply of; increase
7. Increases in the price of natural
gas caused the ________ sawdust to ________.
a) demand for; decrease c) supply of; decrease
b) demand for; increase d) supply of; increase
8. Increases in the price of pulp caused
the ________ sawdust to ________.
a) demand for; decrease c) supply of; decrease
b) demand for; increase d) supply of; increase
9. The Dungeness crab market is
represented by Q = 4,000P – 1,400 and Q = 73,000 – 2,000P where Q is measured
in
pounds (per month) and P is
measured in dollars per pound.
a) Does a shortage or a surplus of Dungeness crab exist when
the price is $14 per pound AND what is
the size of
the shortage or surplus? Show your calculations. 1 marks.
b) Indicate whether the following increases, decreases or
does not change if the market moves from its situation in
part a) to its
equilibrium.
·
price;
·
demand;
·
quantity
demanded;
·
supply;
and
·
quantity
supplied. 2 marks.
c) What are the equilibrium price (to the nearest cent) and
the equilibrium quantity in the Dungeness crab market?
Show your
calculations. 2 marks.
Suppose an event that affects
the Dungeness crab market causes the equation, Q = 4,000P – 1,400, to change to
Q = 4,000P – 32,420.
d) If the price in the Dungeness crab market remains at the
same level as in part c), does a shortage or a surplus of
Dungeness crab
exist AND what is the size of the shortage or surplus? Show your calculations. 1 mark.
e) What are the new equilibrium price (to the nearest cent)
and the new equilibrium quantity in the Dungeness crab
market? Show your calculations. 2 marks.
f) Give three specific and distinct events that could have
caused the equation, Q = 4,000P – 1,400, to change to
Q = 4,000P – 32,420. Be precise.
3 marks.
10. Using a short
written paragraph that includesrelevant
economic terminology, explain why AND how the market is
affected
by the event(s).
Be clear and as detailed as possible.
If you do not provide a written paragraph answer, you will
lose
at least 3 marks for each part of the question.
If you fail to use relevant economic terminology, you will lose marks.
a) Event: The price of wheat declines
Market: Canadian
lentils
b) Event: A drought occurs in India’s lentil growing regions
Market: Canadian
lentils
c) Event: Wildfires in Fort McMurray cause oil production to fall
Market: Natural
gas
d) Event: The price of natural gas
decreases
Market: Natural
gas appliances
e) Event: The price of oil decreases
Market: Paint
f) Event: The price of oil decreases
Market:
Insolvency Trustee Services in Alberta
g) Events: Lumber production decreases AND the price of pulp
increases
Market: Sawdust
Illustrate
each market before and after the event(s) using a single properly-labelled
demand and supply graph. You will
draw
a total of seven graphs, one for each part of the question. If your graphs are not properly-labelled, you
will lose
marks.
Summarize
the impacts of the event(s) on the market by completing the following
table. In each cell of the table, insert
one
of the following: no change, increase, decrease, or unknown change.
Part
Change
in Demand
Change
in Quantity Demanded
Change
in Supply
Change
in Quantity Supplied
Change
in Equilibrium Price
Change
in Equilibrium Quantity
a)
b)
c)
d)
e)
f)
g)
5
marks for each part; 35 marks in total.
You may find the following articles
useful for this question.
Eric Atkins. “Indian Demand Spurs
Record Lentil Seeding.” The Globe and
Mail, 22 April 2016, .proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1783188668″>http://search.proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1783188668
Jeffrey Jones and Jeff Lewis.
“Gas Price Plunge Another Hit to Province.” The
Globe and Mail, 12 May 2016, B10, .proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1788164384″>http://search.proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1788164384
Rahul Oberoi. “Oiling the Wheel.”
Money Today, February 2015, .businesstoday.in/moneytoday/stocks/falling-oil-prices-will-bring-a-windfall-for-india-inc/story/215108.html”>http://www.businesstoday.in/moneytoday/stocks/falling-oil-prices-will-bring-a-windfall-for-india-inc/story/215108.html
Bill Mah. “Hot Spot for Consumer
Debt.” Edmonton Journal, 11 March
2016
.proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1772416169″>http://search.proquest.com.ezproxy.langara.bc.ca/canadiannewsmajor/docview/1772416169
Gordon
Hamilton. “B.C.’s New In-demand Commodity is … Sawdust.” The Vancouver
Sun, 12 April 2008,.canada.com/vancouversun/news/business/story.html?id=35a4e55d-86ee-4ddf-a4d6-908791c66366″>http://www.canada.com/vancouversun/news/business/story.html?id=35a4e55d-86ee-4ddf-a4d6-908791c66366
11. Print out page 4 of Assignment #2 that
is posted under Files and use it as the cover page for your assignment. Write your
name in the correct places on
the cover page and attach it to the front of your assignment submission. Do not write
anything else on either side of
the cover page. 2 marks.
ASSIGNMENT #2 – ECON 1220
Last
Name/Surname/Family Name: ________________________
First
Name: __________________________
Mark:
________/60
