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Economics Review

Economics Review. Do now: Questions from review?? Do Later: Read chapter 17 (first half) and take notes. Review!. 1- What is the difference between scarcity and rarity ? 2- why is it bad to be inside the production Possibility Curve ? 3- How do we use marginal analysis? Explain. Price.

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Economics Review

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  1. Economics Review Do now: Questions from review?? Do Later: Read chapter 17 (first half) and take notes

  2. Review! 1- What is the difference between scarcity and rarity? 2- why is it bad to be inside the production Possibility Curve? 3- How do we use marginal analysis? Explain.

  3. Price • Why is the important price the relative price? • What happens when prices change?

  4. Demand: • Demand is: • The law of demand: • Quantity demanded and Price have an inverse relationship

  5. The aw of supply: • Supply is: • The law of supply: • Price and quantity produced are directly related

  6. Market Equilibrium: • What does it mean for a market to be at or not at equilibrium?

  7. Reading the demand and supply curves Which is the demand curve? What does line 1 mean? What does line 2 mean? What does line 1 mean on the supply curve? Line 2? What happens when we are not at the market clearing price?

  8. Price floors: • Price floors are limits on how low a price can fall. • Why do you think they might use them? • What happens to the rest of the goods?

  9. Price ceilings • Price Ceilings are restrictions on how igh a price can go • Why do you think they might be used? • What might develop to fulfill the demand?

  10. What do you think? • What are the effects of price ceilings and floors?

  11. Shifts in the curve: • What does it mean for a curve to shift??

  12. Why does the Demand curve shift? • Income: how will a change in income shift the demand curve? • Price of substitutes: • Price of complements:

  13. Why does the Demand curve shift? • Population changes: • Tastes/popularity: • Future expectations:

  14. Why does the supply curve shift? • Technology: • Price of inputs: • Number of firms:

  15. Why does the supply curve shift? • Price of substitute products: • Price of joint products: • Future expectations:

  16. Why do we care? • Effects of shift in Demand: • Effects of shift in Supply:

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