ECON 1 Section 5 Demand: The Benefit Side of the Market. Administrative stuff (aprox. 3 min). PS-1 due TODAY!!! Leave them on the table.
|
|
- Magdalen Rogers
- 5 years ago
- Views:
Transcription
1 Contact Details ECON 1 Section 5 Demand: The Benefit Side of the Market. GSI: Ramon Estopina Office: Evans Office Hours: Tuesday 1-3 PM estopina@haas.berkeley.edu Handouts: Trough . Anybody want to help? ECON 1 Section 5 Page 1 ECON 1 Section 5 Page 2 Section 4 Agenda Administrative stuff (aprox. 3 min). Review of Last Session & Lecture (5 min). Exercise 5-3 (10 min). Exercise 5-4 only parts a) & b). (5 min) Exercise 5-6 (10 min). Exercise 5-7 (10 min). Feedback from PS-1 (5 min). Re-cap (aprox 3 min, let s see). Administrative Stuff - reminder PS-1 due TODAY!!! Leave them on the table. Do you have name tags?. Please come on time!!! I can not make changes to sections. Students in waiting list will be notified by JAYA SIL (jsil@are.berkeley.edu) if accepted. ECON 1 Section 5 Page 3 ECON 1 Section 5 Page 4 Administrative Stuff - OH Review of Last Session - 9/9 th DO s I read the book and I didn t get the elasticity concept. Can we go over it? Can you explain me again what sunk costs are? I tried to do problem 5-4 from the book for practice, but I m still struggling with the concepts of substitutes. Can you help me? Bring pen, pencil & eraser. DO NOT s I do not have a clue what elasticity is. Can we go over it? On the due PS-1, is this a sunk cost? On the due PS-5, I say these are substitute markets, am I right? Bring pen, pencil & FORGET eraser. Problems in Supply & Demand Curve. Equilibrium. Disequilibrium. Movement and Shift of D & S curves. Exercises 4-2/4-4/4-3/4-13/4-14 ECON 1 Section 5 Page 5 ECON 1 Section 5 Page 6
2 Review of Last Lecture - 9/9 th Utility, Marginal Utility. Law of Diminishing Marginal Utility. Utility Maximization. Elasticity (Price elasticity of Demand, Income Elasticity, Cross-price Elasticity). Rational Spending Rule. Important to remember!! Utility: Satisfaction consumers derive from activities. Rational Spending Rule: Spending allocated across goods so MU per dollar (MU / P) is same for each good. Total Expenditure = P* = Total Revenue (TR). Price elasticity of demand: percentage change in quantity demanded divided by percentage change in price. P / = P P P ECON 1 Section 5 Page 7 ECON 1 Section 5 Page 8 Important to remember (2)!! Trick for elasticity: Elastic. Inelastic. Exercise 5 3 (F&B page 131) Martha s marginal utility form consuming orange juice = 75 utils/ounce. Martha s marginal utility form consuming coffee = 50 utils/ounce. Orange juice costs $0.25/ounce. Coffee costs $0.20/ounce. Is Martha maximizing her total utility from the two beverages?. ECON 1 Section 5 Page 9 ECON 1 Section 5 Page 10 Exercise 5 3 (cont d) Utility Maximization: allocation of time and income to maximize satisfaction. Marginal Utility: Additional utility gained from consuming one additional unit of a good. Rational Spending Rule: Ratio of marginal utility to price must be the same for each good the consumer buys. MUc MUs = Pc Ps Exercise 5 3 (cont d) What is the Utility Martha receives on her last $ spent on orange Juice? MUo 75 utils/ounce = = 300 utils/$ Po $0.25/ounce What is the Utility Martha receives on her last $ spent on orange Juice? MUc 50 utils/ounce = = 250 utils/$ Pc $0.20/ounce ECON 1 Section 5 Page 11 ECON 1 Section 5 Page 12
3 Exercise 5 3 (Conclusion) Since the two are not equal, she is not maximizing her utility. She should spend more on orange juice and less on coffee. Law of Diminishing Marginal Utility: when consumption of a good increases beyond some point, MU of each additional unit declines (Assumption based upon observation). ECON 1 Section 5 Page 13 Exercise 5 4 (F&B page 131) Packs of Bagels bought in Davis, each day at a variety of prices. Number of packs Price of Bagels purchased per day ($/pack) (000s) ECON 1 Section 5 Page 14 Exercise 5 4 (cont d) A) Graph the daily demand curve for packs of bagels in Davis. P ($/pack) (000s of packs/day) Exercise 5 4 (cont d) B) Derive an algebraic expression for the demand schedule. Where: Y = a + bx a = Vertical Intercept. P = 6 - b = Slope = Rise / Run. 3 ECON 1 Section 5 Page 15 ECON 1 Section 5 Page 16 Exercise 5-4 (continued) Now is your turn!!! Do rest of the parts (C to G) at home. We will review them next session. Why? Show how elasticity varies along D?. Practice problems?. Ensure you come next week?. Ensure you read the lecture notes?. Make me happier?. All of the above? And the winner is I LL TELL YOU NEXT WEEK!!! Exercise 5 6 (F&B page 132) Is the demand for a particular brand of car, like a Chevrolet, likely to be more or less price-elastic than the demand for all cars? Trick: Think in market for cars vs. market for Chevrolets. Price elasticity of demand: percentage change in quantity demanded divided by percentage change in price. P P / = P P ECON 1 Section 5 Page 17 ECON 1 Section 5 Page 18
4 Exercise 5-6 (cont d) From lecture: Also: GOOD PRICE ELAST. SUBSTs.? TR? Elastic >1 Yes if P Inelastic <1 Few if P Price elasticity of demand relatively high if substitutes are readily available. If share of budget is high (big ticket items), have higher price elasticity of demand Timeframe: Price elasticity is higher in long run than in short run, since substitutions can be made. ECON 1 Section 5 Page 19 So: Exercise 5-6 (Conclusion) The price elasticity of a good generally increases with the number of substitutes it has. It is easier to substitute a Ford or Toyota for a Chevrolet than it is to substitute a motorcycle or a skateboard for a car. Thus the market demand curve for cars is likely to be less elastic with respect to price than the market demand curve for Chevrolets. ECON 1 Section 5 Page 20 Exercise 5-6 (extra) Suggested by one of your classmates: Think about the market for gas (petrol, oil, whatever cars drink ). Is it likely to be elastic or inelastic? What about the demand for gas at the pump? How is the market of gasstations? Why the difference? What does it mean for the petrol companies? Exercise 5-7 (F&B page 132) Consider: senior executives, junior executives, students. Which is likely to have the most / least price-elastic demand for membership in the Association of Business Professionals? ECON 1 Section 5 Page 21 ECON 1 Section 5 Page 22 Exercise 5 7 (cont d) If share of budget is high (big ticket items), have higher price elasticity of demand But, the richer a person is, the smaller a given expenditure will be as a proportion of her overall budget, and hence the less likely she will be to respond dramatically to a price change. Thus, senior executives, (assuming they are the richest of the three), should have the least price-elastic demand curves. Students, the poorest, should have the most price-elastic demand curves. Feedback from PS-1 First: Did you all handout the PS-1? What do you think of the PS-1? Any uestions you want me to prepare for next week? ECON 1 Section 5 Page 23 ECON 1 Section 5 Page 24
5 Where to Get More Information Class Book: Chapter 5. Class Book: Chapter 6. Summary Terms: Utility. Marginal Utility. Law of Diminishing Marginal Utility. Utility Maximization. Elasticity. Rational Spending Rule Applied to: 4 problems. ECON 1 Section 5 Page 25 ECON 1 Section 5 Page 26 Next class Next Class: Section 6 Monday, Sept, 16 th. Finish problem 5-4. We ll go over problems 6-3 / 6-4 / 6-5. Give it a try during the weekend!!! Volunteers for the handouts distribution? Read ch. 6 & 7 before section. Thank you for coming on time!!! Enjoy the Weekend. ECON 1 Section 5 Page 27
Practice Exam One. Chapter 1
Practice Exam One Name Chapter 1 1. Residents of your city are charged a fixed weekly fee of $6 for garbage collection. They are allowed to put out as many cans as they wish. The average household disposes
More informationCh. 7 outline. 5 principles that underlie consumer behavior
Ch. 7 outline The Fundamentals of Consumer Choice The focus of this chapter is on how consumers allocate (distribute) their income. Prices of goods, relative to one another, have an important role in how
More informationAP Microeconomics Chapter 7 Outline
I. Learning Objectives In this chapter students should learn: A. How to define and explain the relationship between total utility, marginal utility, and the law of diminishing marginal utility. B. How
More informationRecall from last time. Econ 410: Micro Theory. Cournot Equilibrium. The plan for today. Comparing Cournot, Stackelberg, and Bertrand Equilibria
Slide Slide 3 Recall from last time A Nash Equilibrium occurs when: Econ 40: Micro Theory Comparing Cournot, Stackelberg, and Bertrand Equilibria Monday, December 3 rd, 007 Each firm s action is a best
More informationChapter 21. Consumer Choice
Consumer Choice Utility is most closely defined as a) extra. b) marginal. c) usefulness. d) satisfaction. e) opportunity cost. Copyright Houghton Mifflin Company. All rights reserved. 21 2 Utility is most
More informationECON 101 Introduction to Economics1
ECON 101 Introduction to Economics1 Session 8 Consumer Choice Theory Lecturer: Mrs. Hellen A. Seshie-Nasser, Department of Economics Contact Information: haseshie@ug.edu.gh College of Education School
More informationWeek 1 (Part 1) Introduction Econ 101
Week 1 (art 1) Introduction Econ 101 reliminary Concepts (Chapter 2 g 38-41 & 47-50) Economics is the study of how individuals and societies choose to use scarce resources that nature and previous generations
More informationShort-Run Versus Long-Run Elasticity (pp )
Short-Run Versus Long-Run Elasticity (pp. 38-46) Price elasticity varies with the amount of time consumers have to respond to a price Short-run demand and supply curves often look very different from their
More informationECON 3710, Intermediate Microeconomics Exam #1 Spring, 2008
ECON 3710, Intermediate Microeconomics Dr. Tod Porter Exam #1 Spring, 2008 Last Name First Name 1. (30 pts.) Put an "X" directly over the "T" if the statement is true, or an "X" over the "F" if it is false.
More informationLecture 6 Consumer Choice
Lecture 6 Consumer Choice Business 5017 Managerial Economics Kam Yu Fall 2013 Outline 1 Rational Choice Consumption Decisions Market Demand 2 Consumers Responsiveness Price Applications Income Substitutes
More informationEconomics 101 Midterm Exam #2. April 9, Instructions
Economics 101 Spring 2009 Professor Wallace Economics 101 Midterm Exam #2 April 9, 2009 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not
More informationPPJNI" I IFIITIIBIH UI'IIVERSITY EXAMINER(S) FACULTY OF MANAGEMENT SCIENCES QUALIFICATION: BACHELOR OF ECONOMICS
I IFIITIIBIH UI'IIVERSITY OF SCIENCE HI ID TECHNOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE QUALIFICATION: BACHELOR OF ECONOMICS QUALIFICATION CODE: 07BECO LEVEL:
More informationDemand- how much of a product consumers are willing and able to buy at a given price during a given period.
Ch. 4 Demand Ch. 4.1 The Demand Curve (Learning Objective- explain the Law of Demand) In your world- What are the goods and services that you demand? What happens to your buying when the price goes up
More informationDemand, Supply, and Equilibrium
Sep, 2016 Demand, Supply, and Equilibrium Economic Department, Saint Louis University Instructor: Xi Wang What happens in a market? What is a Market? You walked into a farmers' market There stand a lot
More informationPractice Exam 3: S201 Walker Fall with answers to MC
Practice Exam 3: S201 Walker Fall 2007 - with answers to MC Print Your Name: I. Multiple Choice (3 points each) 1. If marginal utility is falling then A. total utility must be falling. B. marginal utility
More informationClass Agenda. Note: As you hand-in your quiz, pick-up graded HWK #1 and HWK #2 (due next Tuesday).
Class 7 Class Agenda 1. Finish discussion on consumer and producer surplus (welfare theory). 2. Elasticity problems (individual/group work to prep for quiz). 3. Quiz #1. Note: As you hand-in your quiz,
More informationTheory of Consumer Behavior First, we need to define the agents' goals and limitations (if any) in their ability to achieve those goals.
Theory of Consumer Behavior First, we need to define the agents' goals and limitations (if any) in their ability to achieve those goals. We will deal with a particular set of assumptions, but we can modify
More information9/24/2008. Utility. Utility and Consumer Demand. Law of DMU. Measuring Utility. Income Effect. Scarcity is our lot
Utility Utility and Consumer Demand Ch. 6 We ll come back to Ch. 5 later Something s usefulness Or, the amount of satisfaction you get from an item You can create a monetary value to describe satisfaction
More informationChapter 10: Monopoly
Chapter 10: Monopoly Answers to Study Exercise Question 1 a) horizontal; downward sloping b) marginal revenue; marginal cost; equals; is greater than c) greater than d) less than Question 2 a) Total revenue
More informationChapter 4 DEMAND. Essential Question: How do we decide what to buy?
Chapter 4: Demand Section 1 Chapter 4 DEMAND Essential Question: How do we decide what to buy? Key Terms demand: the desire to own something and the ability to pay for it law of demand: consumers will
More informationOCR Economics A-level
OCR Economics A-level Microeconomics Topic 2: How Competitive Markets Work 2.3 Supply and demand, and the interaction of markets Notes A market is created when buyers and sellers interact. A sub-market
More informationConsumer Behavior. McGraw-Hill/Irwin. Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
06 Consumer Behavior McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Law of Diminishing Marginal Utility Utility is the satisfaction one gets from consuming a good
More information1. T F The resources that are available to meet society s needs are scarce.
1. T F The resources that are available to meet society s needs are scarce. 2. T F The marginal rate of substitution is the rate of exchange of pairs of consumption goods or services to increase utility
More informationPRINCIPLES OF MICROECONOMICS (ECON ) Department of Economics, University of Colorado Fall, M,W,F: 2-2:50 am, Room: HALE 270
PRINCIPLES OF MICROECONOMICS (ECON 2010-100) Department of Economics, University of Colorado Fall, 2003 M,W,F: 2-2:50 am, Room: HALE 270 Professor: Charles de Bartolome Office hours: M 4-4:45 pm, Tu 10-11am,
More informationSlide Set 3: Consumer Choice Market Demand & Elasticity
Economics 10 Slide Set 3: Consumer Choice Market Demand & Elasticity University of North Carolina Chapel Hill Lecture Outline Consumer preferences, Utility diminishing marginal utility Marginal Benefit,
More informationFAQ: Decision-Making Strategies
Q&A: Decision-Making Strategies Question 1: What is supply and demand? Answer 1: Supply refers to the actions of firms to create, distribute, and market goods and services. Firms create products that they
More information(per day) Pizzas. Figure 1
ECONOMICS 10-008 Dr. John Stewart Sept. 25, 2001 Exam 1 Detailed solution for one Form of the Midterm: The general question are the same for all forms but some questions differ in details so correct answer
More informationUnit 4: Consumer choice
Unit 4: Consumer choice In accordance with the APT programme the objective of the lecture is to help You to: gain an understanding of the basic postulates underlying consumer choice: utility, the law of
More informationObjective: What is the law of supply? What are supply schedules and supply curves? What is elasticity of supply?
Understanding Supply Objective: What is the law of supply? What are supply schedules and supply curves? What is elasticity of supply? *Be sure to leave a couple blank lines under each question and answer
More information2. What is Taylor s marginal utility per dollar spent on the 2 nd race? a. 2 b. 3 c. 4 d. 5
ECON 251 Practice questions based on Spring 2013 Exam 2 Taylor has $100 to spend on playing golf and running in races. The price of a round of golf is $20 and the price of running a race is $10. The total
More informationMarket Equilibrium, the Price Mechanism and Market Efficiency. Chapter 3
Market Equilibrium, the Price Mechanism and Market Efficiency Chapter 3 Equilibrium Equilibrium is defined as a state of rest, self-perpetuating in the absence of any outside disturbance. Example: a book
More informationEcon 2113: Principles of Microeconomics. Spring 2009 ECU
Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total
More informationCommerce 295 Midterm Answers
Commerce 295 Midterm Answers October 27, 2010 PART I MULTIPLE CHOICE QUESTIONS Each question has one correct response. Please circle the letter in front of the correct response for each question. There
More informationUNIT 4 PRACTICE EXAM
UNIT 4 PRACTICE EXAM 1. The prices paid for resources affect A. the money incomes of households in the economy B. the allocation of resources among different firms and industries in the economy C. the
More informationIntermediate Macroeconomics
Intermediate Macroeconomics ECON 3312 Lecture 2 William J. Crowder Ph.D. Mercantilism Economic Nationalism Beggar-thy-neighbor policies Bullionism Regulate everything! Trade restrictions Monopoly rights
More informationChapter 33: Terms of Trade
Chapter 33: Terms of Trade 1 The Terms of Trade The division of the gains from trade depends on the terms of trade. The terms of trade are measured by the ratio of the price of exports to the price of
More informationBenefits, Costs, and Maximization
11 Benefits, Costs, and Maximization CHAPTER OBJECTIVES To explain the basic process of balancing costs and benefits in economic decision making. To introduce marginal analysis, and to define marginal
More informationMr Sydney Armstrong ECN 1100 Introduction to Microeconomics Lecture Note (4) Price Elasticity of Demand
Mr Sydney Armstrong ECN 1100 Introduction to Microeconomics Lecture Note (4) Price Elasticity of Demand The law of demand tells us that consumers will buy more of a product when its price declines and
More informationChapter 13. Microeconomics. Monopolistic Competition: The Competitive Model in a More Realistic Setting
Microeconomics Modified by: Yun Wang Florida International University Spring, 2018 1 Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting Chapter Outline 13.1 Demand and
More informationECO 100Y L0201 INTRODUCTION TO ECONOMICS. Midterm Test #1
epartment of Economics Prof. Gustavo Indart University of Toronto October 26, 2007 ECO 100Y L0201 INTROUCTION TO ECONOMICS SOLUTIONS Midterm Test #1 LAST NAME FIRST NAME INSTRUCTIONS: STUENT NUMBER 1.
More informationMultiple Choice Part II, Q1 Part II, Q2 Part III Total
SIMON FRASER UNIVERSITY ECON 103 (2008-2) MIDTERM EXAM NAME Student # Tutorial # Multiple Choice Part II, Q1 Part II, Q2 Part III Total PART I. MULTIPLE CHOICE (56%, 1.5 points each). Answer on the bubble
More informationAssignment 2: Supply and Demand
Assignment 2: Supply and Demand (Reference: Mankiw and Taylor, Chapters 4, 5, 6) Multiple Choice 1. Suppose that a large dairy farmer is able to raise the market price of milk by restricting milk supply
More informationMICRO-ECONOMIC THEORY I STUDY NOTES CHAPTER ONE
MICRO-ECONOMIC THEORY I STUDY NOTES CHAPTER ONE UNIT 1 BASIC CONCEPT OF CONSUMER BEHAVIOUR CHAPTER ONE CONTENTS Introduction Objectives Main Content Theory of Consumer Behaviour Consumer Preferences Decisiveness
More informationMidterm 1 60 minutes Econ 1101: Principles of Microeconomics October 12, Exam Form A
Midterm 1 60 minutes Econ 1101: Principles of Microeconomics October 12, 2015 Exam Form A Name Student ID number Signature Teaching Assistant Section The answer form (the bubble sheet) and this question
More informationFigure 4 1 Price Quantity Quantity Per Pair Demanded Supplied $ $ $ $ $10 2 8
Econ 101 Summer 2005 In class Assignment 2 Please select the correct answer from the ones given Figure 4 1 Price Quantity Quantity Per Pair Demanded Supplied $ 2 18 3 $ 4 14 4 $ 6 10 5 $ 8 6 6 $10 2 8
More informationECON 251 Practice Exam 2 Questions from Fall 2013 Exams
ECON 251 Practice Exam 2 Questions from Exams Gordon spends all his income on spatulas and mixing bowls. Spatulas cost $4 and mixing bowls cost $12. Gordon has $60 of income and considers both spatulas
More informationEC1010 Introduction to Micro Economics (Econ 6003)
Cork Institute of Technology (Institiuid Teicneolaiochta Chorcai) Alternative Semester 1 Examination 2007/2008 (Winter 2007) EC1010 Introduction to Micro Economics (Econ 6003) (Time: 2 Hours) External
More informationUnderstanding Price Elasticity: It s No Stretch!
Understanding Price Elasticity: It s No Stretch! Lesson by Lesley Mace, senior economic and financial education specialist, Federal Reserve Bank of Atlanta, Jacksonville Branch Lesson description An important
More informationNB: STUDENTS ARE REQUESTED IN THEIR OWN INTEREST TO WRITE LEGIBLY AND IN INK.
1 INFORMATION & INSTRUCTIONS: DURATION: THREE (3) HOURS TOTAL MARKS: 300 INTERNAL EXAMINER : PROFESSOR D. MAHADEA EXTERNAL EXAMINER: MR R. SIMSON NB: STUDENTS ARE REQUESTED IN THEIR OWN INTEREST TO WRITE
More informationAS/ECON AF Answers to Assignment 1 October 2007
AS/ECON 4070 3.0AF Answers to Assignment 1 October 2007 Q1. Find all the efficient allocations in the following 2 person, 2 good, 2 input economy. The 2 goods, food and clothing, are produced using labour
More informationBremen School District 228 Social Studies Common Assessment 2: Midterm
Bremen School District 228 Social Studies Common Assessment 2: Midterm AP Microeconomics 55 Minutes 60 Questions Directions: Each of the questions or incomplete statements in this exam is followed by five
More informationFEEDBACK TUTORIAL LETTER
FEEDBACK TUTORIAL LETTER 1 ST SEMESTER 2017 ASSIGNMENT 1 [] MAY 2017 1 COURSE: COURSE CODE: TUTORIAL LETTER: 01/2017 DATE: 03/ 2017 Dear Student Thank you for submitting your first assignment on time.
More informationCopyright 2010 Pearson Education Canada
What are the effects of a high gas price on buying plans? You can see some of the biggest effects at car dealers lots, where SUVs remain unsold while sub-compacts sell in greater quantities. But how big
More informationName. I Short Answers (15 points).
Name_ Economics and Institutions: MGMT 7730 Test 1 - Sample You have 150 minutes to complete the exam. Make sure you answer the easier questions first before getting bogged down on the tougher ones. There
More informationRobert Ackerman Office Hours: 2:00-3:00PM T/Th Office: PA202 (Phillips Hall Annex) Economics 101
Robert Ackerman rkackerm@live.unc.edu Office Hours: 2:00-3:00PM T/Th Office: PA202 (Phillips Hall Annex) Economics 101 Economics 101 Today Questions/issues? Frequently missed Aplia Q s Week 2 topics Week
More informationIntermediate Microeconomics Midterm
Econ 201 Spring 2016 Name: Student ID: Intermediate Microeconomics Midterm Thursday April 21, 2016 Beomsoo Kim There are 7 questions and 130 possible points. There are 2 pages to this exam. Please write
More informationFinal Exam: ECON-100A Intermediate Microeconomics Bob Baden Section I: Answer at least two questions (answer all parts of the questions you choose)
Final Exam: ECON-100A Intermediate Microeconomics Bob Baden Section I: Answer at least two questions (answer all parts of the questions you choose) Question 1: (16 points) Donald Fribble is a stamp collector.
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Homework3 Name The homework3 consists 30 questions in total fromchapter 6, 10, and 11. You should bring your answer on Monday, March 18th. in class, and we will have last five minutes to bubble the scantron
More informationMidterm 1 60 minutes Econ 1101: Principles of Microeconomics October 8, Exam Form A
Midterm 1 60 minutes Econ 1101: Principles of Microeconomics October 8, 2012 Exam Form A Name Student ID number Signature Teaching Assistant Section The answer form (the bubble sheet) and this question
More informationEconomics 323 Microeconomic Theory Fall 2016
pink=a FIRST EXAM Chapter Two Economics 33 Microeconomic Theory Fall 06. The process whereby price directs existing supplies of a product to the users who value it the most is called the function of price.
More informationEconomics 323 Microeconomic Theory Fall 2016
peach=b FIRST EXAM Chapter Two Economics 33 Microeconomic Theory Fall 06. The process whereby price directs existing supplies of a product to the users who value it the most is called the function of price.
More informationa. $2700. b. $3000. c. $1700. d. $3300.
Econ2010 Practice Exam#2 I. Multiple Choice (12 questions 4 points apiece) Select the best answer to each of the following questions. Place your response to each question in the space provided on the last
More information2014 $1.75 $10.00 $ $1.50 $10.50 $ $1.65 $11.00 $ $2.00 $11.50 $150
Economics 101 Fall Homework #4 Due Tuesday, November 14, Directions: The homework will be collected in a box before the lecture. Please place your name, TA name, and section number on top of the homework
More informationChapter 6 Lecture - Elasticity: The Responsiveness of Demand and Supply
Chapter 6 Lecture - Elasticity: The Responsiveness of Demand and Supply 1 The Price Elasticity of Demand and Its Measurement We define price elasticity of demand and understand how to measure it. Although
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 2
Economics 2 Spring 2016 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 2 1.a. Recall that the price elasticity of supply is the percentage change in quantity supplied divided
More informationElasticity. Shape of the Demand Curve
Lecture 4 Elasticity Eric Doviak Principles of Microeconomics Shape of the Demand Curve When prices change, change in quantity demanded depends on shape of demand curve Consumer 1 has a very elastic demand
More informationDEMAND. Chapt er. Key Concepts. Consumption Choices
Chapt er 8 UTILITY AND DEMAND Key Concepts Consumption Choices Consumption choices are determined by the interaction of the household s consumption possibilities and its preferences. The household s consumption
More informationThe principles of HOW PEOPLE MAKE DECISIONS
1 Ten Principles of Economics P R I N C I P L E S O F MICROECONOMICS FOURTH EDITION N. GREGORY MANKIW Premium PowerPoint Slides by Ron Cronovich 2007 update 2008 Thomson South-Western, all rights reserved
More informationTheRevisionGuide (www.therevisionguide.com) is a free online resource for Economics and Business Studies.
TheRevisionGuide.com Accelerating your potential Economics Revision AS Economics Demand Notes by: Apsara Sumanasiri Student Name : Date:. TheRevisionGuide (www.therevisionguide.com) is a free online resource
More informationECO232 Chapter 25 Homework. Name: Date: Use the following to answer question 1: Figure: Coffee and Comic Books
ECO232 Chapter 25 Homework Name: Date: Use the following to answer question 1: Figure: Coffee and Comic Books 1. (Figure: Coffee and Comic Books) Refer to the figure. A consumer has $5 to spend on comic
More information1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price
1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. The two things needed for demand to exist are: willingness
More informationI. Price Elasticity of Demand: Amy s demand for cheesecakes is Q d = 90 4P.
Economics 101 Homework #3 Fall 2008 Due 10/28/2008 at beginning of lecture Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on
More informationCHAPTER THREE DEMAND AND SUPPLY
CHAPTER THREE DEMAND AND SUPPLY This chapter presents a brief review of demand and supply analysis. The materials covered in this chapter provide the essential background for most of the managerial economic
More informationVersion 1 DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO. READ THESE INSTRUCTIONS FIRST.
Economics 101 Name Fall 2012 TA Name 11/27/2012 Discussion Section # Second Midterm Student ID # Version 1 DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO. READ THESE INSTRUCTIONS FIRST. You
More informationProfit Maximization. Econ 410: Micro Theory. Profit Maximization. Recall from last time. Firm Profit Maximization and Competitive Supply. q 0.
lide 1 lide 3 Econ 410: Micro Theory Firm Profit Maximization and Competitive upply Wednesday, November 14 th, 2007 Profit is positive when R(>C( Profit Maximization ince profit is equal to the difference
More informationDemand - the desire, ability, and willingness to buy a product.
Demand - the desire, ability, and willingness to buy a product. 1. You must have the desire for the product 2. You must be able to make a purchase 3. You must be willing to make a purchase 4. Purchases
More informationCHAPTER 3 ELASTICITY AND SURPLUS. Monday, September 19, 11
CHATER 3 ELASTICITY AND SURLUS YOU ARE HERE ELASTICITY One of the most important concepts in economics is elasticity The elasticity of demand and elasticity of supply are basically the slope of the supply
More informationUnit I The Principles of Economics
Economics Chapters 1-2 & 4-6 Duke Chapter 1 Unit I The Principles of Economics Explain the difference between a need and a want. Explain the difference between goods and services. Scarcity - Find three
More information1. Fill in the missing blanks ( XXXXXXXXXXX means that there is nothing to fill in this spot):
1. Fill in the missing blanks ( XXXXXXXXXXX means that there is nothing to fill in this spot): Quantity Total utility Marginal utility 0 0 XXXXXXXXXXX XXXXXXXXXXX XXXXXXXXXXX 200 0 = 200 1 200 XXXXXXXXXXX
More informationPICK ONLY ONE BEST ANSWER FOR EACH BINARY CHOICE OR MULTIPLE CHOICE QUESTION.
Econ 101 Summer 2015 Answers to Second Mid-term Date: June 15, 2015 Student Name Version 1 READ THESE INSTRUCTIONS CAREFULLY. DO NOT BEGIN WORKING UNTIL THE PROCTOR TELLS YOU TO DO SO You have 75 minutes
More informationDemand & Supply of Resources
Resource Markets 1 Demand & Supply of Resources Resource demand Firms demand resources As long as marginal revenue exceeds marginal cost To maximize profit Resource supply People supply resources To the
More informationHomework 2 Answer Key
Econ 226 Principles of Microeconomics Fall, 24 Dr. Kathryn Wilson Due Date: Tuesday, September 28 th Homework 2 Answer Key 1. When the of movie admissions increases from $7 to $8, the demanded falls from
More information1 of 14 5/1/2014 4:56 PM
1 of 14 5/1/2014 4:56 PM Any point on the budget constraint Gives the consumer the highest level of utility. Represent a combination of two goods that are affordable. Represents combinations of two goods
More informationIntroduction to Agricultural Economics Agricultural Economics 105 Spring 2016 First Hour Exam Version 1
1 Name Introduction to Agricultural Economics Agricultural Economics 105 Spring 2016 First Hour Exam Version 1 There is only ONE best, correct answer per question. Place your answer on the attached sheet.
More informationa. Find MG&E s marginal revenue function. That is, write an equation for MG&E's MR function.
Economics 101 Spring 2015 Answers to Homework #5 Due Thursday, May 7, 2015 Directions: The homework will be collected in a box before the lecture. Please place your name on top of the homework (legibly).
More informationmicroeconomics II first module
Lecture 2 Perfectly competitive markets Kosmas Marinakis, Ph.. Important notes 1. Homework 1 will is due on Monday 2. Practice problem set 2 is online microeconomics II first module 2013-18 Kosmas Marinakis,
More informationChapter 14 Perfectly competitive Market
Chapter 14 Perfectly competitive Market But first lets look at this Profit Maximization Profit Maximization This occurs where marginal revenue (MR) = marginal cost (MC). MR = MC Marginal revenue is the
More informationEconomics : Principles of Microeconomics Spring 2014 Instructor: Robert Munk April 24, Final Exam
Economics 001.01: Principles of Microeconomics Spring 01 Instructor: Robert Munk April, 01 Final Exam Exam Guidelines: The exam consists of 5 multiple choice questions. The exam is closed book and closed
More informationShort-Run Costs and Output Decisions
Semester-I Course: 01 (Introductory Microeconomics) Unit IV - The Firm and Perfect Market Structure Lesson: Short-Run Costs and Output Decisions Lesson Developer: Jasmin Jawaharlal Nehru University Institute
More informationMultiple Choice Questions Exam Econ 205 Pascal Courty MOCK MIDTERM
Multiple Choice Questions Exam Econ 205 Pascal Courty MOCK MIDTERM Instructions: This is a closed-book exam. There are 30 questions and you have 45 minutes. Each question has only one correct answer. A
More informationECON 1000 D. Come to the PASS workshop with your mock exam complete. During the workshop you can work with other students to review your work.
It is most beneficial to you to write this mock midterm UNDER EXAM CONDITIONS. This means: Complete the midterm in 2.5 hours. Work on your own. Keep your notes and textbook closed. Attempt every question.
More informationEconomics E201 (Professor Self) Sample Questions for Exam Two, Fall 2013
, Fall 2013 Your exam will have two parts covering the topics in chapters 4 (page 91 through end of chapter), 5 and 6 from the Parkin chapters and chapter 10 (up to page 317, up to but not including the
More information1. A weekend fisherman notices the following relationship between hours spent fishing along the breakwaters of CCP and the quantity of fish caught:
1. A weekend fisherman notices the following relationship between hours spent fishing along the breakwaters of CCP and the quantity of fish caught: Hours Quantity of fish caught 0 0 1 10 2 18 3 24 4 28
More informationManagerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay. Lecture -29 Monopoly (Contd )
Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay Lecture -29 Monopoly (Contd ) In today s session, we will continue our discussion on monopoly.
More informationELASTICITY. Chapt er. Key Concepts
Chapt er 4 ELASTICITY Key Concepts Price Elasticity of Demand The price elasticity of demand is a units-free measure of responsiveness of the quantity demanded of a good to a change in its price when all
More informationSelected brief answers for review questions for first exam, Fall 2006 AGEC 350 Don't forget, you may bring a 3x5" notecard to the exam.
1 Selected brief answers for review questions for first exam, Fall 2006 AGEC 350 Don't forget, you may bring a 3x5" notecard to the exam. These are brief answers intended to help you find the complete
More informationIntroduction to Agricultural Economics Agricultural Economics 105 Spring 2017 First Hour Exam Version 1
1 Name Introduction to Agricultural Economics Agricultural Economics 105 Spring 2017 First Hour Exam Version 1 There is only ONE best, correct answer per question. Place your answer on the attached sheet.
More informationUNIT 2 CONSUMER'S BEHAVIOUR & THEORY OF DEMAND POINTS TO REMEMBER Consumer : is an economic agent who consumes final goods and services. Total utility : It is the sum of satisfaction from consumption of
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
MBA 640, Survey of Macroeconomics Fall 2006, Quiz #2 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The price elasticity of demand is defined
More informationConsumer and Producer Surplus and Deadweight Loss
Consumer and Producer Surplus and Deadweight Loss The deadweight loss, value of lost time or quantity waste problem requires several steps. A ceiling or floor price must be given. We call that price the
More information