Finally, determine the equilibrium quantity. Assume more schools require students to buy calculators at the same time that new technology makes it cheaper to produce calculators. Explain in words and with the help of a neatly drawn and labeled Supply and Demand Diagram how the market for calculators will adjust to a new equilibrium. Be sure to indicate in words and on your diagram whether the new equilibrium price and quantity will be higher or lower than before. Write an essay which explains why you agree or disagree with the statement below.
Economists are wrong to assume people are rational.
People are not rational and smokers prove it. People smoke even though they know they may get cancer. Then in order to reduce their chances of getting cancer they limit the amount of cigarettes they keep at home. The reason they keep only a few cigarettes at home is not because they can't afford more. It is because if the cigarettes were readily available they would smoke more than they think they should.