This is JEOPARDY

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# This is JEOPARDY - PowerPoint PPT Presentation

This is JEOPARDY. Supply and Demand Mr. Booth/Alex Trebek. Categories. 100. 200. 300. 400. 500. Def. of Demand. 100. 200. 300. 400. 500. Def. of Supply. 100. 200. 300. 400. 500. Elastic or Inelastic. What If?. 100. 200. 3 00. 400. 50 0. Random. 100. 200. 300. 400.

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### This is JEOPARDY

Supply and Demand

Mr. Booth/Alex Trebek

Categories

100

200

300

400

500

Def. of Demand

100

200

300

400

500

Def. of Supply

100

200

300

400

500

Elastic or Inelastic

What If?

100

200

300

400

500

Random

100

200

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400

500

Review Questions

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500

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 the Income 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 Substitutions or the Substitution Effect?

Demand for these goods fall as income rises. Example: Discounted clothing

What are Inferior Goods?

When the use of a product increases the use of another product. Example: Cereal and Milk

What are Complements?

What are Variable Costs?

Tax on items the government is interested in discouraging. Ex: Tax on Cigarettes

What are Excise Taxes?

This controls businesses behavior. Ex. Government _____the prescription drug industry so people don’t die from a dangerous drug

What is Regulation?

Example: Cost that a business must pay regardless of output. Example: A business paying its lease or even utilities.

What are Fixed Costs?

Insulin

What is Inelastic?

Ice Cream

What is Elastic (many substitutes if prices goes up)?

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?

Want is Technology/Increase/Shift 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?

A. Government Action/tobacco will decrease in supply and supply of corn will increase and move to the right.

Situation: Substitutes. The price goes up for a movie. What happens to the demand of renting a DVD (Substitute). It goes _____

What is Up ?

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?

A. What is productivity/

Supply will increase and shift the curve to the right?

You own a company that makes wire. The price of copper has recently gone up. What characteristic is it and what happens to supply?

A. Characteristic is input costs and supply will decrease and go to the left.

This law states that the marginal benefit of using each additional unit of a product during a given period will decline

What the Law of Diminishing Marginal Utility?

A government payment that partially covers the cost of an economic activity. Example: Government made payments to double the supply of ethanol (gasoline substitute)

What is a Subsidy?

A. Supply is above the equilibrium price = SurplusSupply 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?

Does supply have an inverse or direct relationship?

A. A direct relationship. If demand goes up, supply goes up because producers think they can make more money with more product sold.