Economics Chapter 6:. Prices and Decision Making. Economics Chapter 6: Prices and Decision Making. Prices serve as signals to both producers and consumers. In doing so, they help decide the basic WHAT, HOW, and FOR WHOM questions that all societies face.
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Prices and Decision Making
1st left hand page Question #1:
Imagine that no matter how much you studied, you already knew you were going to get a “C” in economics. How would this affect your incentive to study? Explain your answer.
The Price System At Work
1st left hand page Question #2:
Imagine that you want to go to a concert but you find out it is sold out at ticket outlets. What effect will this shortage of tickets have on the price of any remaining concert tickets? Explain.
2nd left hand page Question #1:
U.S. soybean farmers had a record-high harvest in 1998. What likely affect did the increase in the supply of soybeans have on their price? Explain
Market Demand and Supply Schedule
Social Goal vs Market Efficiency
Target Price – a price floor for farm products
Agricultural price supports were introduced during the 1930s to support farm incomes.
2nd left hand page Question #2:
Think of the last item you decided not to buy. What message did your decision send to the manufacturer? Explain your answer.