Econ-100



1st List of Things to DO at your OWN…Topics: Basics of Economics, Economic Systems, Demand, Supply, Market systemQuestion # 01: IdentifyingWhat three basic questions must every society answer, and why?Question # 02: Determining Cause and EffectQuestion # 03: Determining Cause and EffectQuestion # 04: OrganizingUse a graphic organizer similar to the one below to identify and describe the factors of production.Sr #FactorDescription1234Question # 05: Critical ThinkingHow can studying economics help us make better choices about how to use scarce resources?Question # 06: Economic ApplicationHow does scarcity affect your life? Provide several examples of items you had to do without because of limited resources, and explain how you adjusted to this situation.Question # 07: Determining Cause and EffectProduct MarketProduct MarketQuestion # 08: Idea IllustrationImagine you have Rs. 1000 to spend. What one item would you buy? Make a graphic organizer to illustrate your final choice, the opportunity cost of your choice, and the trade-offs.Question # 09: Determining Cause and EffectImagine you have 2000 Rs. to spend. What one item would you buy? Complete the graphic organizer below to illustrate your final choice, the opportunity cost of your choice, and the trade-offs. Also mention your decision-making strategy.Trade-offs (Choices)Top 2 ChoicesFinal ChoiceOpportunity CostTrade-offs (Choices)Top 2 ChoicesFinal ChoiceOpportunity CostQuestion # 10: Describing the Main IdeaUse a graphic organizer like the one below to describe how economic systems answer the basic economic questions.Economy TypeWhat, How, and For WHOM?Traditional EconomyCommand EconomyMarket EconomyMixed EconomyQuestion # 11: Main Idea DescriptionWhat is the relationship between the demand schedule and the demand curve?Question # 12: Determining Cause and EffectUsing a graphic organizer like the one below, explain how a change in price changes the quantity demanded of an item.PriceQuantity DemandedQuantity DemandedIncreaseDecreasePriceQuantity DemandedQuantity DemandedIncreaseDecreaseQuestion # 13: Critical Thinking SkillsHow does the principle of diminishing marginal utility explain the slope of the demand curve?Question # 14: Using GraphsCreate your own demand schedule for an item you currently purchase. Next, plot your demand schedule on a demand curve. Be sure to include labels.Question # 15: Main Idea DescriptionWhat is the difference between a change in quantity demanded and a change in demand? Using a graphic organizer similar to the one below, describe the factors of change in quantity demanded and change in demand.Question # 16: Main Idea DescriptionUsing a graphic organizer similar to the one below, describe the determinants of market demand.Question # 17: Critical ThinkingHow and why does a change in price affect the demand for substitutes? Provide an example.Question # 18: Economic ApplicationName a product that you recently purchased because it was on sale. Identify one substitute and one complement for the product and describe how your demand for the substitute and complement changed because of the sale.Question # 19: Economic ApplicationWill Shakespeare is a struggling playwright in sixteenth-century London. As the price he receives for writing a play increases, he is willing to write more plays. For the following situations, use a diagram to illustrate how each event affects the equilibrium price and quantity in the market for Shakespeare’s plays. a. The playwright Christopher Marlowe, Shakespeare’s chief rival, is killed in a bar brawl. b. The bubonic plague, a deadly infectious disease, breaks out in London. c. To celebrate the defeat of the Spanish Armada, Queen Elizabeth declares several weeks of festivities, which involves commissioning new plays. Question # 20: Determining Cause and EffectA survey indicated that chocolate is Americans’ favorite ice cream flavor. For each of the following, indicate the possible effects on demand, supply, or both as well as equilibrium price and quantity of chocolate ice cream. a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk-producing cattle in their herds by a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. b. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream. d. New technology for mixing and freezing ice cream lowers manufacturers’ costs of producing chocolate ice cream.Question # 21: Economic ApplicationFor each of the following scenarios, use a supply and demand diagram to illustrate the effect of the given shock on the equilibrium price and quantity in the specified competitive market. Explain whether there is a shift in the demand curve, the supply curve, or neither. (a) An unexpected temporary heat wave hits the East Coast. Show the effect in the ice cream market in New England. (b) The government introduces a tax on ice cream which is paid by producers. What is the effect in the ice cream market? (c) China and Mexico are major producers of textiles. Workers in Mexico decide to go on strike. Show the effect on the market for Mexican textiles. (d) Show the effect of the situation described in (c) on the market for Chinese textiles. (e) Suppose the government imposes a price cap on bottled water. Show the effect in the bottled water market. Question # 22: Economic ApplicationInterview an owner or manager of a local business about the effects of recent price increases for a product. Is the demand for these goods or services elastic or inelastic? Why?Question # 23: Math Practice and Economic ApplicationA hamburger stand raised the price of its hamburgers from $2.00 to $2.50. As a result, its sales of hamburgers fell from 200 per day to 180 per day. Was the demand for its hamburgers elastic or inelastic? Why?Question # 24: Economic ApplicationAirlines in the United States generally do not offer reduced round-trip airfares during holidays such as Easter, Thanksgiving, and Christmas. What can you conclude about the elasticity of demand for airplane travel at these times?Question # 25: Main Idea DescriptionExplain the difference between the income effect and the substitution effect.Question # 26: Main Idea DescriptionDescribe the difference between elastic demand and inelastic demandQuestion # 27: Main Idea DescriptionExplain how the total expenditures test can be used to determine demand elasticity.Question # 28: Main Idea DescriptionIdentify and then describe the determinants of demand elasticity.Question # 29: Main Idea DescriptionHow do consumers react to price changes on products with elastic, inelastic, and unit elastic demand?Question # 30: Critical ThinkingThink about two commodities i.e. commodity A and commodity B. The share of commodity A’s expenditure in total expenditure is 0.5%, whereas share of commodity B’s expenditure in total expenditure is 35%. Which commodity is elastic and why?Question # 31: Critical ThinkingDemand curves of M and N commodities are given. Label the diagrams and comment that which commodity is more price responsive (elastic) and which is less price responsive (inelastic). How you conclude this?MCommodityNCommodityMCommodityNCommodityQuestion # 32: Determining Cause and EffectHow an increase in price of certain commodity is going to affect the Total Expenditure in case of elastic, inelastic and unitary elastic case?Question # 33: Determining Cause and EffectAccording to the Law of Supply, what will happen to the number of products a firm offers for sale when prices go down? What will happen if the cost of production increases while prices remain the same?Question # 34: Math Practice and Economic ApplicationCreate a supply schedule and a supply curve that shows the following information: American automakers are willing to sell 200,000 cars per year when the price of a car is $20,000. They are willing to sell 400,000 when the price is $25,000 and 600,000 at a price of $30,000.Question # 35: MAth Practice and Graphic Abilities A Firm has fixed cost of $15 and variable cost is indicated in the table. Complete the table if the per unit price of firm’s product is $55. Also construct the graphs of the following. Units of laborQuantityTVCTFCTCMCTRMRProfit 000??????????????????1145??????????????????2285??????????????????33120??????????????????44150??????????????????55185??????????????????66225??????????????????77270??????????????????88325??????????????????99390??????????????????1010465??????????????????Question # 36: Determining Cause and EffectUse the table below to help you take notes as you read the summaries that follow. Think about what happens when there are surpluses and shortages of certain products.The effect onSurplusShortage PriceDemand Supply Question # 37: Graphic abilitiesConstruct graphs for product “A” and mention the changes that take place in market equilibrium as well as in equilibrium price and quantity. The price of substituted good “B” has decreased more than the decrease in number of sellers of commodity “A”.Consumer’ income has increased more than increase in the productivity of firm, producing commodity “A”.There is 5% increase in supply and 10% increase in demand.The price of complimentary good “B” has decreased more than the decrease in number of sellers of commodity “A”. Question # 38: Determining Cause and EffectRazor blades are complementary goods for razor handles, while electric razors are substitutes. Make general demand curves for both. Then show how the rise in the cost of razor handles, if they were sold separately, would affect the demand curves for its complementary and its substitute products.Question # 39: Analytical Abilities Check“A Journey of thousand miles starts with a single step…Lets put the first step in the right direction, which is a guarantee of success afterward…”Note: it will be very helpful for you if you do the Activities and Assessments at the end of every chapterGOOD LUCK ................
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