Part A

Your son is graduating from high school and is about to enter the work force. He has developed a strong curiosity about our economic system and how it works. Because you have a good understanding of basic economics, he has asked you to explain several concepts that are essential to an understanding of how the economy works. Your son has asked you to explain the following concepts and ideas:

• Absolute and comparative advantage: Explain how these concepts describe the benefits and costs of international trade.
• “Invisible hand”: What is it and how does it affect the decision-making process in our economic system?
• Circular flow diagram: Include the government sector in your explanation, a description of the roles that each participant plays in the economy, and how the different sectors interact in the markets.
• The Production Possibilities model: Provide an example and include a summary of what the model is illustrating and the economic implications for the economy.
• Microeconomics and macroeconomics: Explain the differences between the two and why economics is divided into these two subdivisions.

Deliverables:

• Microsoft Word document that addresses the above-noted concerns and meets APA standards.
• Include a summary section in your report that contains 5-7 bullet points identifying your major findings or conclusions of your paper.
• Submit the summary section as your initial post in the Discussion Area by the due date assigned. Include the full report as an attachment to your posting.
• By the end of the week, comment on at least two other presentations and identify the strengths and weaknesses of each.
• All submissions must be original and all resources must be properly acknowledged.

Part B

Supply and Demand Concepts

You have been hired by a new firm selling electronic dog feeders. Your client has asked you to gather some data on the supply and demand for the feeder, which is given below, and address several questions regarding the supply and demand for these feeders.

Your client has asked that you develop a report addressing the following questions so that you can present these findings to their Board of Directors:

Questions:

1. Construct a graph showing supply and demand in the electronic dog feeder market, using Microsoft Excel.
2. How are the laws of supply and demand illustrated in this graph? Explain your answers.
3. What is the equilibrium price and quantity in this market?
4. Assume that the government imposes a price floor of $180 in the feeder market. What would happen in this market?
5. Assume that the price floor is removed and a price ceiling is imposed at $90. What would happen in this market?
6. Now, assume that the price of feeders drops by 50%. How would this change impact the demand for feeders? Explain your answer and reconstruct the graph developed in question one to show this change.
7. Assume that incomes of the consumers in this market increases. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
8. Assume that the number of sellers decreases in this market. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
9. Explain the difference between a normal good and an inferior good. Would your answers to question 7 change depending on whether this good is a normal or inferior good? Why?

Submission Details:

• Develop your analysis in Microsoft Excel format. Enter non-numerical responses in the same worksheet using textboxes.