Transcript 100 - Economics @ LHS

Muffin Mix
Lemon Juice
Pirates
Oligopullies
Fish Sticks
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Summarize the Law of Demand.
Draw & label a demand curve.
As a consumer, you buy more
when the price is low.
If you want to buy more of
something, which way does the
demand curve shift?
To the RIGHT
Define elasticity of demand.
Give one example of an inelastic
good.
As the producer do you want to
raise or lower the price on an
inelastic good?
Elasticity measures how we
react to a change in prices.
Some things, INELASTIC, we
always have to buy so quantity
is basically constant. Other
things we will stop buying.
Inelastic we have to buy so you
want to raise the price.
Name one substitute and one
complement for a hamburger.
Substitute--pizza
Complement--milkshake
What does ceteris paribus mean?
All else held constant.
Can’t evaluate changes in
economy when looking at
multiple variables.
Summarize the law of supply.
Draw a supply curve.
As a producer you want to sell
more when the price is high.
Explain the difference between a
subsidy and an excise tax.
Subsidies are gov’t payments to
lower the price…we buy more.
Excise taxes are meant to raise
the price…we buy less.
What is the most expensive cost
of production for most
businesses?
LABOR
How are fixed and variable costs
different?
Provide on example of each.
Fixed costs, like capital, can be
bought once and reused…pitcher.
Variable costs, like land and labor,
need to be bought each time…like
lemons.
What does marginal mean?
EXTRA or ONE MORE
Where do you find happiness?
Draw it on the board.
Who is more unhappy whenever
the market price is set too high?
Why?
The producer is unhappy
because of the excess supply.
They have a surplus of their
product, which means they are
losing money.
Why would the government use
a price ceiling?
Give an example of one.
Price ceilings used to keep
prices down so we can afford to
buy the INELASTIC things we
have to.
Price ceiling on milk or rent.
What question do you ask
yourself to determine which
curve will shift?
Does it affect the cost of
producing the product?
If the price of milk goes up,
what will happen to the cost of
buying cereal?
Explain.
Milk and cereal are
complements…if the price of
milk goes up, we buy less milk.
Buying less milk results in less
demand for buying cereal. A
decrease in demand shifts the
curve to the left, reducing price
and quantity.
Define market power. As a
producer do you want it?
Market Power is the ability to
change prices.
Yes, you want it because market
power is what allows you to
make a profit.
Compare price fixing with price
wars.
As consumers, which do we
prefer?
Price fixing involves agreeing to
keep prices high while price
wars involve fighting to have the
lower price.
As consumers we like to see
price wars.
Compare PC, MC, O, & M in
terms of their market power.
List running least to greatest.
What will most limit how much
money you can make as a
business?
Number of competitors…that’s
why market power is so critical.
How can producers use price
discrimination to make more
money?
By charging people based on
what they are willing to pay they
can make more money. If
someone will pay $1.00 for a
candy bar let them. If someone
else would pay $2.00 then
charge them 2.00.
You make more money.
How long can
cockroaches live
after their heads
have been cut off?
a)12 minutes
b)5 hours
c)9 days
d)13 months
9 days
How many trees does it take to
print the Sunday edition of the
New York Times?
a) 10,000
b) 43,000
c) 89,000
d) 5 million
b) 43,000 trees
How much liquid (in weight)
can the average disposable
diaper hold?
a) 10 ounces
b) 1.5 pounds
c) 4 pounds
d) 7 pounds
7 pounds
How many hamburgers has
McDonald’s sold since
opening?
a) Over 5 million
b) Over 300 million
c) Over 35 billion
d) Over 100 billion
Love the Mac…over 100 billion
Who founded economics? What
book did he write? What year
was it published?