Supply and Demand and Labor Supply Curve free essay sample

Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2007, fish sold for $2. 50 per pound, meat was $3. 00 per pound, and fruit was $1. 50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5. 00 per pound, but fruit prices stayed at $1. 50 and meat prices had actually fallen to $2. 00. Can you say what happened to the overall â€Å"price level†? How might you construct a measure of the â€Å"change in the price level†? What additional information might you need to construct your measure? Inflation is the increase in the general level of prices for goods and services. The overall â€Å"price level† in this particular situation inflated; increased. You can construct a measure of the â€Å"change in the price level† by looking at the price of the goods each month over the course of the entire year. We will write a custom essay sample on Supply and Demand and Labor Supply Curve or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Take all the data and graph it to determine any trends. The low catch of fish means there is a low supply of fish and therefore the demand increases which accounts for the increase in price. The additional information that is needed to construct a measure is why the meat price decreased. One possible reason is there could have been an influx of meat that forced the price to be lowered because there was simply too much meat at the end of the year the price decreased in order to get rid of the surplus, the demand went down and the supply went up. 1. Define unemployment. Should everyone who does not hold a job be considered â€Å"unemployed†? To help with your answer, draw a supply and demand diagram depicting the labor market. What is measured along the demand curve? What factors determine the quantity of labor demanded during a given period? What is measured along the labor supply curve? What factors determine the quantity of labor supplied by the households during a given period? What is the opportunity cost of holding a job? Unemployment is the number or percentage of people who are unemployed. Everyone who does not hold a job should be considered â€Å"unemployed† because they are not collecting wages for a service. The amount of workers companies will hire is measured along the demand curve and the actors that determine the quantity of labor demanded during a given period are wages and the number of unemployed people who are seeking work. The amount of workers seeking work is measured along the labor supply curve and the factors that determine the quantity of labor supplied by the households during a given period are different wages. The opportunity cost of holding a job is how it makes you feel, empowerment for yourself, and will hel p you understand your career and your life; focus on the bigger picture not financial numbers.