ECON101 Lecture Notes - Lecture 5: Root Mean Square, Demand Curve, Making Money

46 views3 pages

harlequindinosaur217

21 Sep 2016

School

University of Alberta

Department

Economics

Course

ECON101

Professor

Gordon Lee

For unlimited access to Class Notes, a Class+ subscription is required.

m4cle4ngoodf3llow and 39493 others unlocked

ECON101 Full Course Notes

Verified Note

99 documents

Document Summary

As a student, you eat a lot of ramen noodles. When you start making money, you will likely not buy as much ramen noodles. The supply function shows the quantity of a good supplied at di(cid:392)erent prices given the technology, the prices of inputs, and other relevant variables. Quantity supply: amount producers are willing to sell during a given time period. As the price of a commodity increases (decreases), the quantity supplied increases (decreases), certeris paribus. Changes in the commodity"s price correspond to movements along the supply curve which are referred to as changes in quantity supplied *** Number of (cid:393)rms: as the number of (cid:393)rms increases, supply increases. Costs of inputs (wages, interest rates, energy prices, opportunity costs) The producers" perceptions of future prices and quantities can in(cid:394)uence today"s supply. Anything where you can replace one good with another using the same basic inputs.

Related Questions

DEMAND and SUPPLY FUNDAMENTALS: Shifts in Demand or Supply

Variables typically included in a multivariate demand function (other than the price and quantity of the item the demand function represents) are consumer tastes and preferences, the number of buyers, spendable (disposable) income, prices of substitute goods, prices of complementary goods, advertising expenditures, weather, and expectations. Recalling that the price of the item being considered is placed on the vertical axis, and the quantity on the horizontal axis, the other variables are termed demand shifters. Please answer the following questions about the affect changes in other variables might have on the demand for the item. These changes will either cause demand to increase(shift right) or decrease(shift left). Use either word as applicable, for the short answer.

If the price of a good increases because the demand for it increases, What would you expect the demand for its complement to do?

If the demand for coffee beans increases, then what is likely to happen to the demand for land on which to grow coffee?

If advertising expenditures for the good being considered are decreased, then demand for the good being considered will likely:

Lattes are a relatively expensive coffee drink. However, being a normal good, as consumersâ disposable income increases, the demand for Lattes should:

5. As the supply of tablet computers and e-readers increases relative to the demand for them, what change in demand for printed textbooks (having digital e-book versions) would you expect?

Variables typically included in a multivariate supply function (other than the price and quantity of the item the supply function represents) are prices of other goods that use similar input resources for production, expectations, the number of suppliers, techniques of production, taxes and subsidies, and prices of input resources, weather. Please answer the following questions about the affect changes in other variables might have on thesupplyof the item. These changes will either cause supply to increase(shift right) or decrease(shift left). Use either word as applicable, for the short answer.

If there is an increase in the number of producers of the item being considered, then the supply of it is likely to:

A tariff is a form of trade restriction (that behaves much like a tax). Suppose the United States removes a high tariff on imported broccoli that had been in effect for a long time. How should this affect the supply of imported broccoli?

A decrease in a government-provided subsidy of the item being considered is likely to ___________its supply.

If the price of an input resource decreases (and there are no cheaper substitutes for the resource) then producers of the item are likely to _____________ its supply?

Suppose broccoli growers have successfully lobbied Congress for a crop subsidy. Once the subsidy becomes available, the domestic broccoli supply is likely to:

When demand for a good is very elastic, revenue ________ when the price falls.

(2)

An elasticity measure less than one means that demand is __________.

(3)

An elasticity measure greater than one means that demand is __________.

(4)

The Latin expression ceteris paribus means

	having made all other necessary changes.
	holding constant all other variables.
	assuming all households have similar incomes.
	given the level of income in the economy.

(5)

A variable measured in terms of money is called a ____________________.

	real variable
	nominal variable
	macroeconomic variable
	microeconomic variable

(6)

Which of the following is true about the importance of money in economics?

	Money is important in both macroeconomics and microeconomics.
	Money is important in macroeconomics but not microeconomics.
	Money is important in microeconomics but not macroeconomics.
	Money is not important in either microeconomics or macroeconomics.

(7)

What is the difference between normative and positive economics?

	Positive economics is descriptive and predictive; normative economics is prescriptive.
	Positive economics highlights the positive aspects of the economy; normative economics highlights the average features.
	Positive economics studies the actions of individuals; normative economics studies the actions of households.
	Positive economics is an applied social science; normative economics is a theoretical social science.

(8)

The slope of the demand curve is negative because

	the quantity of a good demanded decreases as income declines.
	the quantity of a good demanded increases as income declines.
	the quantity of a good demanded increases as the price declines.
	the quantity of a good demanded decreases as the price declines.

(9)

What is the result of an increase in the price of bread, a normal good?

	The demand curve shifts to the right.
	The demand curve shifts to the left.
	The quantity demanded increases.
	The quantity demanded decreases.

(10)

What is the effect on demand for bread when the price of bagels, a substitute for bread, rises?

	The demand curve for bread shifts to the right.
	The demand curve for bread shifts to the left.
	The quantity of bread demanded increases.
	The quantity of bread demanded decreases.

(11)

Which of the following would cause the supply curve for bread to shift inward?

	An increase in the price of bread
	An increase in the price of bagels
	A decrease in the price of bread
	An increase in the price of flour

(12)

An improvement in technology shifts the supply curve outward because

	at every price, firms find producing the good to be more profitable.
	the price of the good increases.
	at every price, firms find producing the good to be less profitable.
	the price of the good decreases.

(13)

Which of the following factors does not affect how much bread a baker is willing to produce?

	The price of bread
	The demand for bread
	The cost of inputs
	Technology

(14)

How do expectations of prices affect how much of a good producers are willing to sell?

	Expectations of prices affect only demand, not supply.
	Actual prices, not expectations of prices, affect supply.
	If producers expect prices to fall in the future, they supply less at every price.
	If producers expect prices to rise in the future, they supply less at every price.

(15)

When the price of a good is above equilibrium level,

	the quantity demanded exceeds the quantity supplied.
	the quantity supplied exceeds the quantity demanded.
	the supply curve shifts to the left.
	the supply curve shifts to the right.

(16)

At a price of P₀ in the diagram below, which of the following statements is true?

	Supply equals demand.
	There is excess demand.
	There is excess supply.
	There is scarcity.

(17)

If demand for bread increases at every price, the equilibrium price of bread will

	fall.
	rise.
	remain unchanged.
	depend on income.

(18)

If the demand for bread declines, then

	at the original equilibrium price, there is excess demand.
	at the original equilibrium price, there is excess supply.
	the supply curve shifts to the right.
	the supply curve shifts to the left.

(19)

Peanut butter and jelly are complementary goods. When the price of peanut butter rises, the demand for jelly ________ and the price of jelly ________.

	rises; falls
	rises; rises
	falls; rises
	falls; falls

(20)

The measure of elasticity that economists use is

	always a positive number.
	always a negative number.
	positive when demand is elastic and negative when demand is inelastic.
	negative when demand is elastic and positive when demand is inelastic.

(21)

Which of the following formulas is the correct expression for the slope of a line?

(22)

Graphically how would an increase in income affect the demand for hamburgers?

	The slope of the demand curve would increase.
	The slope of the demand curve would decrease.
	The demand curve would shift outward, parallel to the original demand curve.
	The demand curve would shift inward, parallel to the original demand curve.

(23)

Given the equation P = $6.00 ? $.40Q, where P is the price of the good and Q is the quantity of the good demanded, how many units will this consumer demand if the price is $3.60?

	1.44 units
	3 units
	3.6 units
	6 units

(24)

Which of the following is true about unit elasticity?

	Revenues remain unchanged when the price changes.
	Elasticity of demand increases as one moves down the demand curve.
	Elasticity of demand decreases as one moves down the demand curve.
	The elasticity of demand is greater than one at every point along the demand curve.

(25)

Which of the following could be a determinant of the quantity demanded of a good?

	The price of the good
	The price of related goods
	Income
	Expectations about the future price of the product
	All of the above

violethare488

Identify four shift factors of supply with the correct explanation of how each affects supply.

Instructions: To receive full credit, you must make a selection for each option. For the correct answer(s), click the box once to place a checkmark. For the incorrect answer(s), click twice to empty the box.

	Producers expect prices of their products to change in the future. As the price that producers expect to sell their products for increases, supply decreases.
	Income declines. As income rises, supply increases.
	Reduction in taxes paid by consumers. As taxes rise, supply falls.
	The price of inputs changes. As the price of inputs rises, supply decreases.
	When new production technologies have introduced the cost of production falls and supply increases.
	Change in taxes paid by producers. As the amount of taxes that producers pay increases, supply decreases.
	Change in consumer tastes. As the taste for a product rises, supply increases.

pearscorpion256

ECON101 Lecture Notes - Lecture 5: Root Mean Square, Demand Curve, Making Money

ECON101 Full Course Notes

Document Summary

Get access

Related Documents

ECON101 Lecture Notes - Lecture 5: Demand Curve, Economic Equilibrium

ECON101 Lecture Notes - Lecture 4: Ceteris Paribus, Demand Curve, Root Mean Square

ECON101 Chapter Notes - Chapter 3: Demand Curve, Inferior Good, Normal Good

Related Questions