Unit 3 Macroeconomics 1

Unit 3 Macroeconomics 1 - Unit 3 Macroeconomics 1 Brenda...

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Unit 3 Macroeconomics 1 Brenda Russell BU204-02 Macroeconomics Unit 3 April 11, 2011
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Unit 3 Macroeconomics 2 Question: The small town of Middling experiences a sudden doubling of the birth rate. After three years, the birth rate returns to normal. Use the graphs for each question, adding any arrows or other indicators that you feel are necessary, to illustrate the effect of these events on the following. 1. What is the effect on the market for an hour of babysitting services in middling today, during this increased birthrate? Explain the change, if any in the price of babysitting, and in both the amount of babysitting demanded and supplied, giving your reasons for these changes. Answer: There are more babies today, so the demand for an hour of babysitting services has raised. This produces a rightward shift of the demand curve for babysitting services from D1 to D2, resulting in a rise in the equilibrium price and quantity as the equilibrium changes. 2. What is the effect on the market for an hour of babysitting services 14 years into the future,
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This note was uploaded on 07/04/2011 for the course BU224 01AU taught by Professor Carolinegagnon during the Spring '09 term at Kaplan University.

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Unit 3 Macroeconomics 1 - Unit 3 Macroeconomics 1 Brenda...

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