Determinants 1
What are the Determinants of Demand?
TIRES
Tastes and Preferences
Income
Related Goods
Expectations
Size of the Market
RENTS
Resource Prices
Expectations
Number of Sellers
Technology
Subsidies/taxes
B: Cleaning your room
C: Your grade on your Econ test
D: Going to the gym
C: your grade on your Econ test
What is the Law of demand? What is the law of supply?
Law of demand- as price increases, quantity demanded decreases
Law of supply- as price increases, quantity supplied increases
If the production possibilities frontier is a straight line, then the...
A: opportunity cost of producing one good is zero
B: society is capable of producing only one of the goods and not the other
C: producer can produce more of both goods simultaneously
D: law of constant opportunity cost applies
E: law of increasing opportunity cost applies
The price of popcorn decreases from $3.00 for one box of 12, to $2.50 for a box of 12. What happens to demand?
QUANTITY DEMANDED increases with a price drop
The price of chocolate increased 12%. What happened to the supply and/or demand curves for chocolate MILK?
Supply curve shifts to the left (decreases). Demand curve stays constant.
The opportunity cost of winning a free ticket to the Super Bowl worth $950 and attending the game is...
A: zero, the ticket was free
B: $950, representing the lost value of selling the ticket to someone else
C: priceless, football is everything
D: Watching the game on TV
the process of examining a change in one variable in a model while assuming that all the other variables remain constant is called...
ceteris paribus
Which question is an example of a microeconomic questions
A: What should the federal government do to reduce the trade deficit with Japan
B: Will the inflation rate remain relatively stable this year?
C: will the merger of two airlines likely lead to higher costs of air travel?
C: will the merger of two airlines likely lead to higher costs of air travel
Soon, car companies will start advertising about their summer-end sales events. Hows does that impact my demand for a new car now?
A new pizza-by-the-slice restaurant opened in Stillwater. How does this impact the demand and/or supply of pizza?
*written on the board
What is the opportunity cost of China and the U.S for producing one more water bottle?
China= 3/2machines
United States= 8/7 machines
What is the definition of a market?
A stamp collector decides to purchase another stamp only when the additional benefit of buying one more stamp exceeds the additional cost of buying this stamp. This dilemma illustrates the concept of...
Demand for cereal decreases (shifts left)
The government placed a tax on imported cars. How does this impact the demand and/or supply of cars?
Supply decreases (shifts left)
Japan's opportunity cost of making CD players is 5 DVD players. South Korea's Opportunity cost of making CD players is 7 DVD players. Who has the comparative advantage in making CD players?
Japan
Definition of Diminishing Marginal Benefit
*Table 2 on the board
The marginal cost of producing 4 units of output is...
I recently got a raise at work. How does this impact my demand and/or supply curve for new jeans?
Demand increases (shifts right)
With summer coming up, the price of ice cream will soon increase. How does this impact the supply for ice cream?
Florida can produce 500 tons of strawberries or 100 tons of oranges. Louisiana can produce 300 tons of strawberries or 200 tons of oranges. Who has the comparative advantage in producing strawberries? Who has the comparative advantage in producing oranges?
Florida has the comparative advantage in producing strawberries. Louisiana has the comparative advantage in producing oranges.
What is the income effect and what does it do?
As purchasing power increases or decreases, buyers buy more or fewer goods respectively. This is part of the reason why the demand curve is negatively sloped
As a result of a decrease in the price of gasoline, consumers can afford to buy more gas for more driving trips. The is an illustration of...
the price effect