Economics Bell Ringer Monday, 11/21/2011 1.Number your handouts and pick up a cup of snacks. You must choose from: pretzels, animal crackers or cheese

Economics Bell RingerMonday, 11/21/2011

1. Number your handouts and pick up a cup of snacks. You must choose from: pretzels, animal crackers or cheese puffs. YOU MAY EAT ONLY ONE TYPE SNACK AND CANNOT DRINK ANY LIQUIDS

2. Setup a table and graph on the graph paper:1. Table: the first column should be for the number of cups of snacks

you eat and the second column should be the marginal utility of each cup of snacks you eat

2. Graph: the x-axis (horizontal) should be labeled cups and start at 0 and go up to at least 5. The y-axis (vertical) should be labeled utility and should go from 0 to 10.

3. During the rest of the period, enjoy as many cups of snacks as you like (BUT NO LIQUIDS) and keep track of your utility by rating your enjoyment from 1 to 10 (10 is highest) in both the table and the graph

Economics Bell RingerTuesday, 11/22/2011

1. Describe what you observe in the graphs

2. How many slices does Ashley demand at $4.00 per slice

3. How many slices does the Market demand at $2.00 per slice

Economics Bell RingerWednesday, 11/23/2011

1. Identify the Key Term:

KEY TERMS(Can be used more than once)

1. Substitution effect

2. Individual demand schedule

3. Demand curve

4. Law of demand

5. Income effect

6. Market demand schedule

7. Demand schedule



1. Today is Cyber Monday, where online retailers provide discounts or free shipping to holiday shoppers. Explain the effect on demand for online goods.

2. How does advertising affect demand for a product?


1. The Euro, the common currency used by many European countries, is in danger of collapsing. The decrease in the value of the Euro has lowered the prices for European goods that we buy in the US. Examples of some goods include fashionable clothing from Italy, high technology machines from Germany, agriculture (wine, cheese, meat) from France.

– Explain how the collapsing Euro may affect demand for these products in the US (USE KEY TERMS)


1. What factors other than price may cause demand to change?

– Will these factors cause demand to rise, fall or both?

Economics Bell RingerThursday, 12/01/2011

1. Pick one of these products. Name three substitutes and three complements for that product

• Orange pop

• Concert tickets

• Pizza

2. If the demand for one of the complements you listed goes up, what would happen to demand for the original good? Why?

Economics Bell RingerFriday, 12/02/2011

1. For each situation, determine if demand will change because of the law of demand or because of a shift in demand. If because of a shift in demand, identify the factor (demographics, income, preference, etc.)

– Sales of winter coats have gone up 35% in the last month. At the same time, sales of hats and gloves went up by 25%

– With the return of the NBA, fans are seeing more commercials with their favorite NBA stars. Demand for Gatorade increased this week.

– Subway restaurant has released a new promotion where customer can get 2 footlong sandwiches for the price of 1 sandwich, the “2 for $5” deal. They observe their stores have sold 20% more sandwiches.


1. How will advertising most likely lead to a shift in the demand curve?

a) Increasing demand for inferior goods

b) Influencing consumer tastes/preferences

c) Leading to a shift in demographics

2. How can expectations about the future change consumer behavior today?

a) Demand will increase if the good is expected to be plentiful

b) Demand will increase if prices are expected to fall

c) Demand will increase if prices are expected to rise

3. The price of Samsung TVs was reduced 40% for the holiday season. Sales for Sony TVs drops 30%. Does this change reflect law of demand or shift in demand? Why?


1. Sales of snow tires have increased 30% recently as Chicagoans are getting ready for the winter. Because of this, sales of shovels and ice scrapers has increased 25%. Is this due to the law of demand or a shift in demand? Why?

2. Car dealers have extra inventory by the end of the year. In order to increase sales, they reduce the price on their vehicles for the holiday season. Is this due to the law of demand or a shift in demand? Why?

3. Sales of HP laptops have increased 50% as they are offering a steep discount during the holidays. Sales of Mac computers have decreased 20% during this time. Is the change in demand for Mac computers due to the law of demand or a shift in demand? Why?

4. Pick a product and explain whether your demand is elastic or inelastic (remember: are there substitutes? How much of your budget do you spend on this? Is this good a luxury item?)


1. Identify the Key Term

1. consuming less of a good and more of anotheras a reaction to a price increase

2. good that consumers demand less of when theirincomes increase

3. change in consumption that results when a priceincrease causes real income to decline

4. not very sensitive to price changes

5. concept that satisfaction decreases with increased consumption of a good or service

2. What factors would cause demand to be more inelastic?Product is a need/essential; Product perceived as a luxury item; Not a lot of substitutes available

Substitution effect (under law of demand bcs price increase caused change in demand)

Inferior Goods

Income Effect (law of demand)

Inelastic Demand

Law of Diminishing Marginal Utility

#58: Bell Ringer Wk 15 (12/12-12/16)

Economics ClassworkMonday, 12/12/2011

1. You MUST work on one of the following

– Ch 4 Project (Ad and Mktg Presentation) (DUE Wed)

– Study for Ch 4 Test (Tuesday)

2. YOU MAY NOT WORK ON

– College Apps or work from another class

3. If you are off task, you get ONE WARNING before you lose computer privileges. Off-task includes

1. Working on non-Econ stuff

2. Visiting inappropriate websites (Twitter, games, MP3/music sites, etc.)

4. TURN IN

1. Bell Ringer from last week

2. Elasticity Handout HW


1. Mr. Vasu is presenting a marketing pitch to Mayor Emanuel to build more bicycle lanes, so that there are more cyclists in Chicago.

a) If the product is bicycles, what do you expect the marketing campaign to do to demand for bicycles? Is this a result of the law of demand or a shift in demand?

b) What are 2 substitutes and 2 complements for bicycles?


1. Identify the Key Term

a) Measure of how consumers respond to price changes

b) Goods that consumers demand more of when income increases

2. Gigio’s notices pizza sales have been falling over the last year even though prices have stayed the same. Which could explain the change in demand?

a) A change in quantity demanded because of the income effect

b) A demand curve shift to the right because of pizza advertisements

c) A demand curve shift to the left because people are eating healthier diets

d) An increase in demand because of the substitution effect of the law of demand

3. Which of the following would cause a restaurant’s sales to fall, even though prices have stayed the same?

a) A local newspaper praised the restaurant’s food

b) A nearby factory shut down

c) Area population increased

d) Gas prices decreased

Elasticity of Demand

Normal Goods


1. Gold prices have fallen more than 11% recently as investors are fearful of the risk of the Euro collapsing and another global recession. As a result, consumers are purchasing less platinum and are instead buying more gold jewelry.

a) Identify whether the change in demand was because of the law of demand or a shift in demand

b) Identify the substitute and the substitution effect in the prompt and explain how they are different

Law of demand: Pricegold falls, Demandgold rises

Substitute: platinum jewelry

Substitution Effect: bcs price of gold has fallen, demand for gold rises since ppl are substituting gold for platinum


1. Tolls on roads in Chicagoland have increased. Focus on the demand for driving on toll roads.

a) What will happen to demand for driving on toll roads?

b) Is this due to the law of demand or shift in demand?

c) Are there income or substitution effects?

d) What is elasticity of demand for driving on toll roads? Why?

e) Identify any normal and inferior goods related to driving on toll roads.

Law of demand: Pricetoll rises, Demandtoll roads falls

Demand will decrease

Income: increased toll means I can afford less tolls, so demand will decrease

Substitution: increased toll means Metra looks more attractice, so demand will decrease

Elastic: substitutes like Metra OR

Inelastic: you have to get to work, this may be only way, so no subs

Normal: coffee, tires, oil checks, gas (complements of driving)

Inferior: pollution, traffic jams


1. In your opinion, write a few sentences about an important current economic issue in the US. Discuss why it is important, why it is an issue and if there are any potential solutions.


1. Write about how economics was involved in something that happened to you over winter break.

• For example: Mr. Vasu visited the office of SEWA, the Self-Employed Women’s Association, in the state of Gujurat, India, which helps poor women in rural India organize and sell their handicrafts. SEWA-made handicrafts are a substitute for factory-made clothes. My demand increased for SEWA’s clothes, so my demand for factory-made clothes decreased. This causes the demand curve to shift to the left.


1. Identify the Key Term1. a period of macroeconomic expansion, or growth, followed by

one of contraction, or decline

2. when the free market alone does not distribute resources efficiently

3. a good or service that can be used by any number of consumers without reducing the benefits to any single consumer

4. set of government programs that protectpeople who face unfavorable economic conditions

5. an economic system in which the government makes all decisions on the three key economic questions

2. What are the 3 Key Economic Questions and 5 Economic Goals?What are we going to produce? How are we going to produce? Who will get it?

Freedom, Security, Efficiency, Growth, Equity

Business Cycle (contraction – recession are related terms; GDP is data we track in biz cycle)

KEY TERMS

1. Recession

2. Safety Nets

3. Central Planning

4. Gross Domestic Product

5. Business Cycle

6. Cash Transfers

7. Free Market Economy

8. Market Failure

9. Non-Rival Good

Market Failure (public goods, free-rider problem, non-rival goods and externalities are all examples of mkt failure)

Non-Rival Good (public goods are examples of non-rival goods; this leads to free-rider problem)

Safety Nets (cash transfers are one type of safety net, so are in-kind benefits like Medicaid, housing aid, food stamps)

Central Planning


1. How does the slope of the supply curve differ from the slope of a demand curve? Explain why they are different.

2. Fill in the blanks:

Increase in Price

Decrease inDemand (pairsof sneakers)

%Change inDemand

%Change in

Price

Elasticity of

Demand

$40 to $50 210 to 180

THEY ARE OPPOSITES!Slope of Demand Curve: Negative / Decreasing; law of demand, price goes up, demand goes downSlope of Supply Curve: Positive / Increasing; law of supply, price goes up, supply goes up

% Change = [ (Orig – New)/Orig ] * 100 Elast of Demand = %Chg Demand / %Chg Price

DROP ALL NEGATIVE SIGNS

14.29% 25% 0.57

I. Identify the Key Term1. use of resources in such a way as to maximize the output of goods and

services

2. hope of reward or fear of penalty that encourages a person to behave in a certain way

3. the market in which households purchase the goods and services that firms produce

4. total value of American goods and services produced in a year.

5. concentration of productive efforts on a limited number of activities

II. What is an example of thinking at the margin?The cost of one extra hour of sleep versus the benefit of one extra hour of studying.KEY IS BENEFIT OR COST OF THE EXTRA/NEXT UNIT PRODUCED/CONSUMED

Efficiency

KEY TERMS

a) Competition

b) Specialization

c) Factor Market

d) Product Market

e) Gross Domestic Product

f) Incentive

g) Opportunity Cost

h) Scarcity

i) Efficiency

Incentive

Product Market (Output in the Circular Flow)

Gross Domestic Product (the business cycle shows the growth and contraction of GDP over time)

Specialization

FINAL REVIEW ASSIGNMENT

(You will earn 5 points on your exam by completing this review and you will be well prepared. No notes allowed on the exam)

a. You will write about every concept/key term

b. The four things to write about for each key term are (either make a grid or a list on paper, whatever is best for your learning style):

I. Definition

II. Sketch/Picture/Diagram (if possible)

III. Complete Sentence (using the word and that helps explain the meaning)

IV. Synonym (word or phrase that means basically the same thing)

c. DUE by end of class on Friday for extra points on the exam, so you can use it to study over the weekend

(we will work on this in class W, Th, F)


1. Elasticity of supply is very similar to elasticity of demand. It tells us how much a producer will supply at a specific price.

a) Supply is always elastic in the long run (over a long time period you can always adjust production)

b) Supply can be elastic or inelastic in the short run (depending on the type of business)

c) If a producer has inelastic supply, it means it is difficult for them to change production based on a change in price

2. Which do you think would have inelastic supply in the short-run? Explain your reasoning.

Farmers, Taco Stand business, Beauty salon or Subway restaurant


1. Identify the Key Term1. economic side effect of a good or service

2. the study of how people make choices when supplies are limited

3. the resources that are used to make goods and services

4. organization that uses resources to produce a product or service, which it then sells

5. principle that limited amounts of goods and services are available to meet unlimited wants

6. all natural resources used to make goods and services

2. Explain the difference between the two types of capital. Is this part of the factor or product market in the circular flow?

Physical Capital: man-made objects; Human Capital: knowledge, training, educationThey are factors of production provided by households to firms in the factor market.

Externality (both positive and negative)

KEY TERMS

1. Firm

2. Households

3. Factors of Production

4. Land

5. Labor

6. Economics

7. Scarcity

8. Externality

9. Incentive

10.Opportunity Cost

Economics

Factors of Production

Firm

Scarcity

Land

Documents

Economics Bell Ringer Monday, 11/21/2011 1.Number your handouts and pick up a cup of snacks. You must choose from: pretzels, animal crackers or cheese