1. (15%) Consider a market for a good or service of your choosing in your local town (be specific).
Suppose you are planning to conduct a study of this market.
a. List at least two specific factors that you believe would cause changes in market
demand. Based on this, write out a hypothetical demand function (i.e., in equation form,
write out how quantity demanded depends on price and the two factors you chose). The
coefficients on your two factors should make economic sense.
b. List at least two specific factors that you believe would cause changes in market supply.
Based on this, write out a hypothetical supply function (i.e., in equation form, write out
how quantity supplied depends on price and the two factors you chose). The coefficients
on your two factors should make economic sense.