1)In what ways has the privatization of prison facilities in the US been counterproductive?

2)An increase in demand will cause a product's output to do what?

3)What role does regulation play in the financial system? Provide examples of how regulation influenced /influences the system.

4)Suppose the demand for towels is given by QD=100−5p and the supply of towels is given by QS=10p.

A. Solve for the equilibrium price and quantity and show it in a graph with the demand and supply curves.

B. Suppose that the supply changes so that at each price, 20 fewer towels are offered for sale. Derive and graph the new inverse supply curve.

C. Solve for the new equilibrium price and quantity. How does the decrease in the supply affect the equilibrium price and quantity sold?

1)The US prisons were privatized with the objective of reducing the burden on taxpayers; however, the step proved to be counterproductive. Some of the ways in which the privatization of prison facilities in the US been counterproductive are:

1. Private prisons do not keep those high-risk prisoners as they increase the cost of private prisons. Thus, the burden of high-risk prisoners is still borne by US taxpayers.

2. Rampant discrimination in private prisons is one of the major disadvantages.

3. Violence between criminals is common in private prisons and hence is not safe.

4. Private prisons are door to corrupt practices in the law and order system.

2)An increase in demand will cause a product's output to increase. The reason is an increase in demand would make consumers more to purchase that product. Thus, the producer has an incentive to increase the output to grab the majority of the market share. Thus, the output will increase with the increase in the demand for the product.

3)The roles of financial system regulation include;

• To provide oversight to the daily operations of the financial institutions and sectors, including the financial market and the banking sector.
• To prevent financial fraud and minimize the amount of risk that a financial institution can take on, to curb excessive risk-taking by the institutions and protect the investors' funds.
• To supervise the financial institutions and protect the investments of the consumers and protect the stability of the financial system.
• To supervise and provide charters to the banking system's operations to ensure the soundness of the whole system.

An example of the influence of regulation in the financial system is the Basel III that allows banks to only count their safest assets as reserves. They may take on riskier investments but should not consider them as part of their reserves. This is to ensure that banks have sufficient reserves to meet all their financial obligations.

4)please see the attached file for the complete solution.