My name is Anna Scheldrup. I’m a senior this year majoring in finance. This is my second quarter being an SI for Krautmann. I love being an SI because financial analysis uses a lot of economics. Throughout the quarter I will be posting different study tools on here. If you ever have any questions feel free to email me!
My Session Schedule, Winter 2016
[box] Monday 3:00-4:00pm, DePaul Center C105
Wednesday 9:00-10:00am, DePaul Center C105
Office Hour: Thursday 4:30-5:30pm, DePaul Center C105 [/box]
Can’t attend any of my sessions? Check out other ECO 105 SI leaders’ schedules here.
I like to make a lot of definition matrix’s in economics because there are so many definitions to remember!
As you will find out soon enough, I love coffee, so here is an example of shifts in supply and demand using the coffee market. Stop by my session this week to see the graphs and hear explanations!
Shifts in supply and demand using the coffee market:
a) a blight on coffee plants kills off much of the Brazilian crop
b) coffee workers organize themselves into a union and gain higher wages
c) coffee is shown to cause cancer in laboratory rats
d)price of tea declines
First, if a blight kills off coffee plants then we will see a decrease in supply. This happens because productivity goes down (because the plants are GONE). Nothing happens to demand, so equilibrium price and quantity both go up.
If coffee workers organize themselves into a union and gain higher wages the price of inputs will go up, so supply will shift left (a decrease in supply).
If coffee is shown to cause cancer in rats, then people will be less likely to buy it because they may fear that they themselves will get cancer. This results in a change in consumer tastes and preferences in a negative manner that decreases demand (shifts it left). A decrease in demand will lower both equilibrium price and quantity.
If the price of tea declines, then the price of a substitute for coffee has gone down (if you agree that coffee and tea are substitutes). Since tea is now cheaper, more people will buy tea, and less will buy coffee. This results in a decrease in demand for coffee. The market results are identical to the cancer in rats example.
Here is a worksheet on supply and demand using an alien invasion! Check it out for more practice with supply and demand!
Here is a worksheet on price floors and ceilings. The link will take you to another blog page. Just click “here” on the other blog page and a PDF will open. Stop by my sessions on Monday, 1/1 and Wednesday, 1/3 for the answers.
Make sure to stop by my sessions this week. As you will notice, the material is getting harder, so if you have any questions do not hesitate to ask. Here is a worksheet on elasticities with the answers included. Email me or stop by my sessions in your have an questions on it. Ellie and I will announce when the midterm review will be by the end of this week.
Here is a worksheet on cost/production theory. Please stop by my session this week for the answers.
Here are some resources from Fall 2015
Economic Model– An economic model is a simplified, small-scale version of some aspect of the economy. Economic models are often expressed in equations, by graphs, or in words.
Efficiency– A set of outputs is said to be produced efficiently if, given current technological knowledge, there is no way one can produce larger amounts of any output without using larger input amounts or giving up some quantity of another output.
PPF– Shows the different combinations of various goods, any one of which a producer can turn out, given the available resources and existing technology.
Economic Growth– An increase in the amount of goods and services produced per head of the population over a period of time.
Demand Curve- The consumer’s willingness to pay for a good. It has an inverse relationship because as price decreases, the quantity demanded increases. As the price increases, the quantity demanded decreases.
Supply Curve- The supplier’s willingness to accept a price for a good. It has a positive relationship because as price increases, quantity supplied will increase. As the price decreases, the quantity supplied decreases.
Equilibrium- The point where the demand curve and supply curve cross. This means that the consumer’s willingness to pay will meet the supplier’s willingness to accept. Notice that there are still suppliers that offer goods at higher prices than people want (no one will buy these goods). And there are suppliers that offer goods at lower prices than people expected to pay (these will be bought up quickly).
Shifts in demand
- price of other goods
- # of consumers
Shifts in supply
- price on an input
- price of other goods
- # of producers
- minimum wage
- housing market
- credit market
- energy market