01:220:102 Lecture Notes - Lecture 13: Dental Floss, Product Type, Toothpaste

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19 Oct 2016

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4 macrovariables (gpie: gdp/output, price levels, international sector, employment. 4 factors of production (llcm: land all natural resources, labor all human effort, capital manmade resources used to produce other things, management entrepreneurs & human leadership. Non-price determinants of demand (tiren: taste, income, related goods (substitutes & complements) prices, expectations about future prices, number of buyers in market. Non-price determinants of supply (nafte: number of sellers in market, alternative goods prices, factor prices, technology, expected goods prices. Edp > 1 demand is elastic (qdx is responsive to p) Price tr price tr (inverse relationship between p & tr) If you want to increase tr, lower price. Edp < 1 demand is inelastic (qdx is unresponsive to p) Price tr price tr (direct relationship between p & tr) If you want to increase tr, increase price: buyers are not responsive to price, will buy regardless. Edp = 0 demand = perfectly inelastic (vertical demand curve)

Related Questions

Section I: Supply & Demand Analysis (Chapter 3) In each of the following 10 questions, show what happens to the Demand, Supply, equilibrium price and equilibrium quantity of copper. Show an increase by use of +, a decrease with a -, and no change with 0 (thatâs a zero, not an O or o). Although in the real world, both supply and demand are constantly changing, in the model we are using here, only one curve shifts per problem. So, if demand goes + or -, supply will be 0, and vice versa. In no case will equilibrium price or equilibrium quantity be 0. You may want to sketch out the supply and demand curve analysis to help in answering the questions. You will also be required to identify which determinant (of demand or supply) has changed, thus causing the shift. Rather than actually writing in the determinant, fill in the blank with the number that corresponds to the relevant determinant, based upon the following list. You may want to refer to the lecture notes entitled Determinants of Demand & Supply in the COURSE CONTENTS section. For questions 1 - 10, refer back to this list. Some you may want to use more than once, some you won't use at all. Copy and paste this list to an MS Word document and then print it out if you don't want to keep scrolling back and forth between this list and the question you're trying to answer. Determinants of Demand: 1. Change in buyer tastes 2. Change in number of buyers 3. Change in income 4. Change in the prices of related goods (on the demand side) 5. Change in consumer expectations Determinants of Supply: 6. Change in resource prices 7. Change in technology 8. Changes in taxes and subsidies 9. Change in prices of related goods (on the supply side) 10. Change in producer expectations 11. Change in the number of suppliers. For example, if a rightward shift in the supply curve for an item were caused by an increase in the number of producers of that item, you would indicate this be entering 11 into the relevant blank. If the demand curve shifted to the left because people didn't like that item anymore (like mimeograph machines), you'd enter 1 into the blank. Q#1 President Trump signs into law a bill that says the U.S. government will subsidize the construction of new homes, office buildings, bridges, and other infrastructure projects requiring copper. Demand; Supply: Equilibrium Price: Equilibrium Quantity Exchanged; Which determinant changed?: Q#2 Non-capitalist economies around the world begin a phase of rapid economic development, construction and growth, becoming increasingly wealthy, as they begin to adopt more capitalist institutions, as in China, Russia, and the former communist countries of East Europe. Demand; Supply: Equilibrium Price: Equilibrium Quantity Exchanged: Which determinant changed?

Question 1

Which compensation method helps to explain the large difference between the salaries of top-level managers and mid-level managers in a firm?

	A.	Tournaments
	B.	New blood
	C.	Piece rate
	D.	Backloaded compensation

3 points

Question 2

Please consider the information provided under Question 19 in Chapter 3 (page 54). Based on the stated information, the optimal number of bees kept if the externality is ignored by Yung is 5,000. Is the socially optimal number of bees higher or lower than 5,000?

	A.	We do not have enough information to answer this question
	B.	Same
	C.	Lower
	D.	Higher

3 points

Question 3

Which of the following factors contribute to the existence of firms?

	A.	All of these factors contribute to firm existence
	B.	Risks associated with specialization
	C.	Incomplete contracts
	D.	Willingness of some people to take on risk in exchange for residual income

3 points

Question 4

Public goods are often subject to free-rider problems because these goods are:

	A.	Non-rival and non-excludable
	B.	Rival and non-excludable
	C.	Non-rival and excludable
	D.	Rival and excludable

3 points

Question 5

Which of the following is the most efficient mechanism for allocating scarce goods?

	A.	Government allocation system
	B.	First-come-first-served system
	C.	Market system
	D.	Random allocation system

3 points

Question 6

Many years ago, most of the major Hollywood movie studios also owned chains of local movie theaters across the US. Today, most of the local movie theaters are owned by other companies. What has happened to the degree of integration in the movie industry over time?

	A.	Less horizontally integrated
	B.	Less vertically integrated
	C.	More horizontally integrated
	D.	More vertically integrated

3 points

Question 7

Your firm produces replacement parts for the nuclear submarines operated by the US Navy. Which one of Porter's Five Forces will be most prominent in determining your strategies and profitability?

	A.	Bargaining Power of Suppliers
	B.	Bargaining Power of Customers
	C.	Threat of New Entrants
	D.	Threat of Substitutes

3 points

Question 8

Which of the following statements is NOT true?

	A.	The market mechanism for allocating resources is most efficient due to the incentives it creates.
	B.	Markets are always the most efficient way to allocate goods, even if the market is not perfectly competitive.
	C.	The random allocation mechanism provides no incentives at all.
	D.	The government allocation mechanism provides no incentive for the economy to grow.

3 points

Question 9

Suppose a firm's cost structure exhibits economies of scope. Which of the following actions is compatible with this cost structure?

Diversify into other product lines

Focus on core competencies and reduce production

Focus on core competencies and maintain constant production

Focus on core competencies and expand production

Question 10

Please refer to Table 8.3 on page 132 in the book. Suppose we change the payoffs in the "low price, low price" cell to 0, 25 from 0, 0. Does this change the Nash equilibrium for the game, and is the game still a Prisoner's Dilemma?

	A.	Equilibrium changes, still a Prisoner's Dilemma
	B.	Equilibrium changes, no longer a Prisoner's Dilemma
	C.	Same equilibrium, no longer a Prisoner's Dilemma
	D.	Same equilibrium, still a Prisoner's Dilemma

3 points

Question 11

Which of the following statements about restricting entry to markets is NOT true?

	A.	Brand identity and logos are expensive to establish, and entrants may find it very expensive to establish comparable position in the market.
	B.	Predatory pricing is illegal but very difficult to prove in court
	C.	Branded products tend to have more elastic demand, which makes it more difficult for entrants to charge high prices and they must stay out of the market.
	D.	A low-quality seller cannot effectively use a warranty program to keep other firms out of its market

3 points

Question 12

Your firm earns $2 million per quarter in total revenue, and your accounting profits are $100,000 per quarter. You do not charge the firm for the use of an old building that you own because it is 50 years old and fully depreciated. However, another firm has offered you $200,000 per quarter to use the facility, and this is the market rental rate for similar facilities. In this case, we know that your:

	A.	Opportunity costs are positive and economic profits are negative
	B.	Opportunity costs and economic profits are positive
	C.	Opportunity costs are negative and economic profits are positive
	D.	Opportunity costs and economic profits are negative

3 points

Question 13

Please refer to Question 13 in Chapter 1 (page 17). What is the marginal cost of reducing global warming by 0.017 degrees?

	A.	MC = 60
	B.	MC = 5
	C.	We do not have enough information to answer this question
	D.	MC = 50

3 points

Question 14

In Chapter 6, Boyes focuses on negative externalities such as the various types of pollution. However, as we discussed during our online session, we can also observe positive externalities in which external benefits are generated for people. Which of the following is NOT an example of a positive externality?

	A.	Workers can help one another to "cover the phones" and make sure that someone is always available to help clients
	B.	Workers can provide ideas to one another about how to solve problems
	C.	All of these cases are examples of positive externalities
	D.	Workers can form carpools and use other means to reduce commuting costs

3 points

Question 15

Common property resources are:

	A.	Non-rival and non-excludable
	B.	Non-rival and excludable
	C.	Rival and non-excludable
	D.	Rival and excludable

3 points

Question 16

The free-rider problem arises in markets for common property resources.

	A.	False
	B.	True

3 points

Question 17

Firms that set their product price below the actual cost of production may be engaging in:

	A.	Predatory pricing
	B.	Monopoly pricing
	C.	Moral hazard
	D.	Dollar-cost averaging

3 points

Question 18

Under a cap-and-trade mechanism to control air pollution, what happens to the price of pollution rights if the supply of righs is reduced (i.e., the supply of rights is reduced)?

Increases

Decreases

No change

Question 19

The key method for a manufacturing firm to avoid hold-up problems is to have another source of inputs.

	A.	False
	B.	True

3 points

Question 20

Your firm sells luxury autos, and you have asked the marketing department to develop and stronger brand identity through a new ad campaign. After the campaign has run for 6 months, you hire an economic consultant to study the impact of the campaign on the demand for your autos. The consultant reports that the demand for your cars is now more elastic than it was 6 months ago. Was the new ad campaign successful?

	A.	Yes
	B.	No

AEC 316 - Agricultural Marketing
Homework Assignment 2: Chapter 2

Name:____________________ Date:____________________

Multiple choice questions.

There is only one correct answer in multiple choice questions. Please, mark the correct

answer. Each multiple choice question is worth 5 points.

1. A perfectly competitive firmâs demand curve equals its:

Marginal cost curve

Average variable cost curve

Average fixed cost curve

Average revenue curve

None of the above

2. A perfectly competitive firm maximizes profits by setting price equal to:

a. Marginal cost

b. Marginal revenue

c. Average revenue

d. Average total cost

e. Average variable cost

3. In order for a monopoly to continue to be a monopoly:

a. The marginal revenue curve must be downward sloping

b. There must be no close substitutes

c. Marginal revenue must equal marginal costs

d. Average total costs must be decreasing

e. None of the above

4. Marketing strategy which involves dividing a broad target market into subsets of consumers who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

a. Brand name

b. Minor ingredients

c. Market segmentation

d. Product features

e. Packaging

5. What characteristic is indicative of oligopolies?

Low profits

Interdependence of firms

Many firms

Entry is blocked

None of the above

6. At an equilibrium price:

a.The self-interest of consumers is maximized

b.Supply equals demand

c.There is an upward pressure on price

d.There is a downward pressure on price

None of the above

7. When both supply and demand increase, equilibrium quantity will:

a.Decrease

b.Increase

Stay the same

Canât say

None of the above

8. Elasticity is a concept that deals with:

a.Market structure

b.Market equilibrium

c.Perfect competition

d.Consumer and producer sensitivity to changes in prices and income

None of the above

9. A set of competing firms producing similar products or a commodity in a market is called a(n) ___ .

a.Branch

b.Competition

c.Channel

Industry

None of the above

10. A market structure where there is only one buyer of a specific product is called:

a.Monopsony

b.Monopoly

c.Oligopsony

Monopsonistic competition

None of the above

Essay question: 50 points

11. Use the agricultural commodity that you selected in Chapter 1 and choose one agribusiness that buys it. Investigate the agribusiness using the Internet and other resources, and then write an essay addressing all or as many as possible of the following aspects of the agribusiness:

Size

Sales

Scope of product line

Worth (if public)

Number of employees

Locations globally

Market structure

Industry sector

All your answers/discussion should be typed in one essay that is at least 15 lines long (using formal English, correct paragraph and sentence structure, and making sure your ideas flow well from one sentence to another) using Times New Roman, 12 point, double space and 1-inch margins all around. Before submitting the final essay, use the âSpelling & Grammarâ function of the MS Word to correct grammar.

At the end of your essay, provide the full citation record in alphabetical order in your list of references. For examples, visit: http://www.saea.org/wp-content/uploads/2013/08/reference-style-sheet.pdf. Please, note that the list of references does not count toward the minimum required 15 lines. Include your references in the text as â(Smith, 2015)â when citing at the end of a sentence, or âAccording to Smith (2015)â when citing at the beginning of a sentence. For example,

Negative publicity is a key determinant affecting consumersâ buying decisions (Ahluwalia, Burnkrant, and Unnava, 2000).

According to Cawley and Rizzo (2005), pharmaceutical products in the same therapeutic class experienced negative spillover in terms of lost sales.

Note: Most of the future essay questions will build on this essay question and/or the one agricultural commodity that you choose. This means that if there is little information on the agricultural commodity that you have chosen for this essay question, you should consider choosing a more common agricultural commodity on which ample information is available. In addition, this course will require you to compile all your answers to the essay questions into one term paper to be submitted by the end of the course. This means that the more effort you put into answering essay questions now, the more material you will have accumulated for your term paper by the end of the semester.

TYPE YOUR ANSWER TO THE ESSAY QUESTION 11 BELOW USING AS MUCH SPACE AS YOU NEED. THEN, PRINT THE HOMEWORK ASSIGNMENT AND SUBMIT THE HARD COPY.

01:220:102 Lecture Notes - Lecture 13: Dental Floss, Product Type, Toothpaste

01:220:102 Full Course Notes

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