Introduction
What is Economics the study of?
Scarcity
Supply goes in which direction?
Up
What elasticity is this?
E<1
Inelastic
What does demand represent?
Willingness to pay/buy
Why am i wrong
“Supply and demand are equal”
They can’t be because they have different slopes
What is the name of the diagram we use to model the economy?
Circular flow diagram/model
What is the law of supply?
As price goes up quantity goes up
Managers acre about elasticity because it affects what ?
Revenue
How to calculate area of a triangle?
(B*H)/2
Or
1/2 (B*H)
What room is class in?
SGMH 1303
What does PPF stand for?
Production possibilities frontier
What are three of the non price determinants of supply?
Cost of inputs, number of suppliers, expectations, technology, price of related goods
What is the midpoint formula (simplified)
(Q2-Q1)/(P2-P1) X (P2+P1)/(Q2+Q1)
What three points on a graph do we need to sole for Producer surplus?
Point where Q(s)=0, equilibrium price and quantity
What are three factors that influence elasticity ?
Time, size of budget item, luxury vs necessity, durable vs non durable, availability of substitutes
Find the opportunity cost of surfboards
(surfboards=S and bodyboards=B)
S=-2B+10
1/2
Demand shifts left, equilibrium price and quantity for strawberries decreases
Is revenue increasing or decreasing?
Quantity effect> price effect
revenue is increasing
What is consumer surplus without numbers ?
(Willingness-what)
Willingness to pay- actual price
what is your professors first name?
Robert/bob
Explain the difference between an inferior good and a normal good?
Inferior: income goes up, you buy less
Normal: income goes up, you buy more
Find equilibrium
Q(d)= 2600-3P
Q(s)=-200+4P
1400 units
Calculate elasticity of demand
P1= 10P2=11
Q1= 84
Q2= 63
-3
What is total surplus ?
CS+PS
What is my favorite color?
Green