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November 14, 2022

Teaghan is a super active child and loves to participate in all kinds of activities. In planning for her activities this semester, she’s interested in soccer, acrobatics, dancing, theater, music, art, track, and archery.

1-Teaghan is a super active child and loves to participate in all kinds of activities. In planning for her activities this semester, she’s interested in soccer, acrobatics, dancing, theater, music, art, track, and archery.

Unfortunately, these events are all scheduled to practice on the same day each week and thus she is not able to do everything and must pick only one.

a. Describe how Teaghan might approach this scenario and her decision-making process. Is there an economic concept (or concepts) which best describes Teaghan’s scenario?

b. Why does Teaghan even have to make a decision? What economic principle is causing this scenario?

2-Suppose you have a market for salami which is currently in equilibrium. Thinking of the supply and demand graph for this market, what would have to happen to cause both the equilibrium quantity of salami in this market to fall and the equilibrium price of salami in this market to rise? Is this even something that could happen?

In your answer, please pay attention to and describe what would have to happen to the supply and demand. (You may of course elaborate with any hypothetical “real life” reasons for any changes in the graph too.)

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