Transcript Supply-and-Demand-Jeopardy

This is JEOPARDY
Supply and Demand
Mr. Booth/Alex Trebek
Categories
Def. of Demand
100 200 300 400 500
Def. of Supply
100 200 300 400 500
Elastic or Inelastic
100 200 300 400 500
What If?
100 200 300 400 500
Random
100 200 300 400 500
Review Questions
100 200 300 400 500
Final Jeopardy
QD would decrease from 10 to 5.
You have $50 and want to buy some CD’s. If
prices of CD’s rose from $5 each to $10, how
would your quantity demanded of CD’s
change?
What is Utility?
Benefit or satisfaction gained from using
a good or service
What is the Income Effect?
You buy more if the price is lower and buy less if the
price is higher
What are Substitutions or the Substitution
Effect?
When you react to a change in price and buy a
similar product Ex. Going to a movie instead of
renting a DVD from Blockbuster
What are Inferior Goods?
Demand for these goods fall as income
rises. Example: Discounted clothing
What are Complements?
When the use of a product
increases the use of another
product. Example: Cereal and
Milk
What is Marginal Product?
The change in total product by adding
more workers
What are Variable Costs?
Costs that depend on the level of output.
Example: Wages for workers
What are Excise Taxes?
Tax on items the government is
interested in discouraging. Ex: Tax on
Cigarettes
What is Regulation?
This controls businesses behavior. Ex.
Government _____the prescription drug
industry so people don’t die from a
dangerous drug
What are Fixed Costs?
Example: Cost that a business
must pay regardless of output.
Example: A business paying its
lease or even utilities.
What is Elastic?
A good with a lot of substitutes.
“Don’t Choke!”
Daily
Double
What is Elastic?
A luxury item like a Ferrari
What is Inelastic?
Insulin
What is Elastic?
Sweet rims for an Escalade
What is Elastic (many substitutes if prices
goes up)?
Ice Cream
Want is Technology/Increase/Shift Right?
A software company invest in a set of fast, new
computers that allow employees to test their new
programs easily and quickly. What factor is this
and how will it affect supply?
A. Government Action/tobacco will decrease in supply and supply of corn
will increase and move to the right.
A farmer is deciding how much tobacco and how much corn to grow on
the farm. Congress recently cut the subsidies that it pays farmers to
raise tobacco. What factor is this and how will it affect supply of both
crops?
What is Up ?
Situation: Substitutes. The price goes up
for a movie. What happens to the
demand of renting a DVD (Substitute).
It goes _____
A. What is productivity/
Supply will increase and shift the curve to the right?
A tool-making company hires several workers who got degrees from a
technical school, where they learned manufacturing techniques.
Which factor is this and how will it affect supply?
“Don’t Choke!”
Daily
Double
A. Characteristic is input costs and supply will
decrease and go to the left.
You own a company that makes wire. The price of copper
has recently gone up. What characteristic is it and what
happens to supply?
What is Marginal Revenue?
Money made from producting an
additional unit of output.
What the Law of Diminishing Marginal
Utility?
This law states that the marginal benefit of using each
additional unit of a product during a given period will
decline
What are Normal Goods?
Goods that consumers demand more of
when their incomes rise
What is Specialization?
When a worker focuses on a particular
aspect of production
What is a Subsidy?
A government payment that partially covers the cost
of an economic activity. Example: Government made
payments to double the supply of ethanol (gasoline
substitute)
A. Supply is above the equilibrium price = Surplus
Supply is below the equilibrium price = Shortage
How are surplus and shortage related to equilibrium
price?
Inelastic
When consumers have few choices, will the demand
be elastic or inelastic?
A. They will buy the substitute because
it’s cheaper.
If the price of a substitute drops, will they buy the
substitute or the original good?
A. An increase in demand for coffee
An increase in demand for one complement will have
what effect on the other complementary good?
Example: An increase in demand for sugar will have
what effect on coffee?
A. A direct relationship. If demand goes up, supply
goes up because producers think they can make more
money with more product sold.
Does supply have an inverse or direct
relationship?