# Economics Bell Ringer 972011.ppt

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```					                 Economics Bell Ringer
Monday, 11/21/2011
1.    Number your handouts and pick up a cup of snacks. You
must choose from: pretzels, animal crackers or cheese
puffs. YOU MAY EAT ONLY ONE TYPE SNACK AND
CANNOT DRINK ANY LIQUIDS
2.    Setup a table and graph on the graph paper:
1.   Table: the first column should be for the number of cups of snacks
you eat and the second column should be the marginal utility of
each cup of snacks you eat
2.   Graph: the x-axis (horizontal) should be labeled cups and start
at 0 and go up to at least 5. The y-axis (vertical) should be
labeled utility and should go from 0 to 10.
3.    During the rest of the period, enjoy as many cups of
snacks as you like (BUT NO LIQUIDS) and keep track of
your utility by rating your enjoyment from 1 to 10 (10 is
highest) in both the table and the graph
Economics Bell Ringer
Tuesday, 11/22/2011
1.   Describe what you observe in the graphs
2.   How many slices does Ashley demand at \$4.00 per slice
3.   How many slices does the Market demand at \$2.00 per
slice
Economics Bell Ringer
Wednesday, 11/23/2011
1.      Identify the Key Term:

KEY TERMS
(Can be used more than once)

1. Substitution effect
2. Individual demand
schedule
3. Demand curve
4. Law of demand
5. Income effect
6. Market demand
schedule
7. Demand schedule
Economics Bell Ringer
Wednesday, 11/23/2011
Economics Bell Ringer
Monday, 11/28/2011
1. Today is Cyber Monday, where online
retailers provide discounts or free shipping
to holiday shoppers. Explain the effect on
demand for online goods.

2. How does advertising affect demand for a
product?
Economics Bell Ringer
Tuesday, 11/29/2011
1.       The Euro, the common currency used by many European
countries, is in danger of collapsing. The decrease in the
value of the Euro has lowered the prices for European
goods that we buy in the US. Examples of some goods
include fashionable clothing from Italy, high technology
machines from Germany, agriculture (wine, cheese, meat)
from France.
–     Explain how the collapsing Euro may affect demand
for these products in the US (USE KEY TERMS)
Economics Bell Ringer
Wednesday, 11/30/2011
1. What factors other than price may cause
demand to change?
–   Will these factors cause demand to rise, fall or
both?
Economics Bell Ringer
Thursday, 12/01/2011
1. Pick one of these products. Name three
substitutes and three complements for that
product
•   Orange pop
•   Concert tickets
•   Pizza
2. If the demand for one of the complements
you listed goes up, what would happen to
demand for the original good? Why?
Economics Bell Ringer
Friday, 12/02/2011
1.       For each situation, determine if demand will change
because of the law of demand or because of a shift in
demand. If because of a shift in demand, identify the factor
(demographics, income, preference, etc.)
–      Sales of winter coats have gone up 35% in the last
month. At the same time, sales of hats and gloves went
up by 25%
–      With the return of the NBA, fans are seeing more
commercials with their favorite NBA stars. Demand for
–      Subway restaurant has released a new promotion where
customer can get 2 footlong sandwiches for the price of
1 sandwich, the “2 for \$5” deal. They observe their
stores have sold 20% more sandwiches.
Economics Bell Ringer
Monday, 12/05/2011
1.    How will advertising most likely lead to a shift in the demand curve?
a)   Increasing demand for inferior goods
b)   Influencing consumer tastes/preferences
c)   Leading to a shift in demographics

2.    How can expectations about the future change consumer behavior
today?
a)   Demand will increase if the good is expected to be plentiful
b)   Demand will increase if prices are expected to fall
c)   Demand will increase if prices are expected to rise

3.    The price of Samsung TVs was reduced 40% for the holiday season.
Sales for Sony TVs drops 30%. Does this change reflect law of
demand or shift in demand? Why?
Economics Bell Ringer
Friday, 12/09/2011
1.   Sales of snow tires have increased 30% recently as Chicagoans are
getting ready for the winter. Because of this, sales of shovels and ice
scrapers has increased 25%. Is this due to the law of demand or a shift
in demand? Why?

2.   Car dealers have extra inventory by the end of the year. In order to
increase sales, they reduce the price on their vehicles for the holiday
season. Is this due to the law of demand or a shift in demand? Why?

3.   Sales of HP laptops have increased 50% as they are offering a steep
discount during the holidays. Sales of Mac computers have decreased
20% during this time. Is the change in demand for Mac computers due
to the law of demand or a shift in demand? Why?

4.   Pick a product and explain whether your demand is elastic or inelastic
(remember: are there substitutes? How much of your budget do you
spend on this? Is this good a luxury item?)
Economics Bell Ringer                  #58: Bell Ringer Wk 15
Monday, 12/12/2011                    (12/12-12/16)
1.    Identify the Key Term
1.   consuming less of a good and more of another
as a reaction to a price increase Substitution effect (under law of
demand bcs price increase caused
change in demand)
2.   good that consumers demand less of when their
incomes increase              Inferior Goods
3.   change in consumption that results when a price
increase causes real income to decline
Income Effect (law of demand)
4.   not very sensitive to price changes
Inelastic Demand
5.   concept that satisfaction decreases with increased
consumption of a good or service
Law of Diminishing Marginal Utility

2.    What factors would cause demand to be more inelastic?
Product is a need/essential; Product perceived as a luxury item; Not a lot of
substitutes available
Economics Classwork
Monday, 12/12/2011
1.     You MUST work on one of the following
–   Ch 4 Project (Ad and Mktg Presentation) (DUE Wed)
–   Study for Ch 4 Test (Tuesday)

2.     YOU MAY NOT WORK ON
–   College Apps or work from another class

3.     If you are off task, you get ONE WARNING before you lose
1.    Working on non-Econ stuff
2.    Visiting inappropriate websites (Twitter, games, MP3/music sites,
etc.)

4.     TURN IN
1.  Bell Ringer from last week
2.  Elasticity Handout HW
Economics Bell Ringer
Wednesday, 12/14/2011
1. Mr. Vasu is presenting a marketing pitch to Mayor
Emanuel to build more bicycle lanes, so that there
are more cyclists in Chicago.

a) If the product is bicycles, what do you expect the
marketing campaign to do to demand for
bicycles? Is this a result of the law of demand or
a shift in demand?

b) What are 2 substitutes and 2 complements for
bicycles?
Economics Bell Ringer
Thursday, 12/15/2011
1.      Identify the Key Term
a)     Measure of how consumers respond to price changes Elasticity of Demand
b)     Goods that consumers demand more of when income increases
Normal Goods
2.        Gigio’s notices pizza sales have been falling over the last year even
though prices have stayed the same. Which could explain the change
in demand?
a)      A change in quantity demanded because of the income effect
b)      A demand curve shift to the right because of pizza advertisements
c)      A demand curve shift to the left because people are eating healthier diets
d)      An increase in demand because of the substitution effect of the law of
demand
3.        Which of the following would cause a restaurant’s sales to fall, even
though prices have stayed the same?
a)      A local newspaper praised the restaurant’s food
b)      A nearby factory shut down
c)      Area population increased
d)      Gas prices decreased
Economics Bell Ringer
Monday, 12/19/2011
1.    Gold prices have fallen more than 11% recently as
investors are fearful of the risk of the Euro collapsing
and another global recession. As a result, consumers
more gold jewelry.
a) Identify whether the change in demand was
because of the law of demand or a shift in demand
Law of demand: Pricegold falls, Demandgold rises

b) Identify the substitute and the substitution effect in
the prompt and explain how they are different
Substitute: platinum jewelry
Substitution Effect: bcs price of gold has fallen, demand for gold
rises since ppl are substituting gold for platinum
Economics Bell Ringer
Wednesday, 12/21/2011
1.    Tolls on roads in Chicagoland have increased. Focus on the
demand for driving on toll roads.
a) What will happen to demand for driving on toll roads?
Demand will decrease
b) Is this due to the law of demand or shift in demand?
Law of demand: Pricetoll rises, Demandtoll roads falls
c) Are there income or substitution effects?
Income: increased toll means I can afford less tolls, so demand will decrease
Substitution: increased toll means Metra looks more attractice, so demand will
decrease

d) What is elasticity of demand for driving on toll roads? Why?
Elastic: substitutes like Metra OR
Inelastic: you have to get to work, this may be only way, so no subs
e) Identify any normal and inferior goods related to driving on toll
Normal: coffee, tires, oil checks, gas (complements of driving)
Inferior: pollution, traffic jams
Economics Bell Ringer
Thursday, 12/22/2011

important current economic issue in the US.
Discuss why it is important, why it is an issue and if
there are any potential solutions.
Economics Bell Ringer
Monday, 01/09/2012
1. Write about how economics was
involved in something that happened to
you over winter break.
•   For example: Mr. Vasu visited the office of SEWA, the
Self-Employed Women’s Association, in the state of
Gujurat, India, which helps poor women in rural India
organize and sell their handicrafts. SEWA-made
handicrafts are a substitute for factory-made clothes.
My demand increased for SEWA’s clothes, so my
demand for factory-made clothes decreased. This
causes the demand curve to shift to the left.
Economics Bell Ringer
Tuesday, 01/10/2011
1.      Identify the Key Term
KEY TERMS            1. a period of macroeconomic expansion, or growth, followed by
one of contraction, or decline
1.   Recession           Business Cycle (contraction – recession are related terms;
GDP is data we track in biz cycle)
2.   Safety Nets     2. when the free market alone does not distribute resources
efficiently
3.   Central Planning    Market Failure (public goods, free-rider problem, non-rival
4.                       goods
Gross Domestic 3. a good and externalities are all examples of mkt failure)
or service that can be used by any number of
Product            consumers without reducing the benefits to any single
consumer
5.   Business Cycle      Non-Rival Good (public goods are examples of non-rival goods;
6.                       this leads to free-rider problem)
Cash Transfers 4. set of government programs that protectpeople who face
unfavorable economic conditions
7.   Free Market         Safety Nets (cash transfers are one type of safety net, so are in-
Economy             kind benefits like Medicaid, housing aid, food stamps)
5. an economic system in which the government makes all
8.   Market Failure     decisions on the three key economic questions
9. Non-Rival Good         Central Planning

2.      What are the 3 Key Economic Questions and 5 Economic
Goals?
What are we going to produce? How are we going to produce? Who will get it?
Freedom, Security, Efficiency, Growth, Equity
Economics Bell Ringer
Wednesday, 01/11/2012
1. How does the slope of the supply curve differ from
the slope of a demand curve? Explain why they
are different.
THEY ARE OPPOSITES!
Slope of Demand Curve: Negative / Decreasing; law of demand, price goes up,
demand goes down
Slope of Supply Curve: Positive / Increasing; law of supply, price goes up, supply goes
up
2. Fill in the blanks:
Decrease in            %                %              Elasticity
Increase in
Demand (pairs        Change in        Change in            of
Price
of sneakers)         Demand            Price           Demand
\$40 to \$50          210 to 180          14.29%             25%             0.57
% Change = [ (Orig – New)/Orig ] * 100       Elast of Demand = %Chg Demand /
%Chg Price
DROP ALL NEGATIVE SIGNS
I.    Identify the Key Term
1.   use of resources in such a way as to maximize the output of goods and
KEY TERMS                services
a) Competition
Efficiency
2.   hope of reward or fear of penalty that encourages a person to behave
b) Specialization        in a certain way
c) Factor Market         Incentive
d) Product Market 3.     the market in which households purchase the goods and services that
firms produce
e) Gross Domestic
Product               Product Market (Output in the Circular Flow)
f) Incentive        4.   total value of American goods and services produced in a year.
g) Opportunity Cost      Gross Domestic Product (the business cycle shows the growth
h) Scarcity              and contraction of GDP over time)
5.   concentration of productive efforts on a limited number of activities
i) Efficiency            Specialization

II.   What is an example of thinking at the margin?
The cost of one extra hour of sleep versus the benefit of one extra hour of studying.
KEY IS BENEFIT OR COST OF THE EXTRA/NEXT UNIT PRODUCED/CONSUMED
FINAL REVIEW ASSIGNMENT
(You will earn 5 points on your exam by completing this
review and you will be well prepared. No notes
allowed on the exam)
a.          You will write about every concept/key term
b.          The four things to write about for each key term are (either
make a grid or a list on paper, whatever is best for your
learning style):
I.       Definition
II.      Sketch/Picture/Diagram (if possible)
III.     Complete Sentence (using the word and that helps explain the
meaning)
IV.      Synonym (word or phrase that means basically the same thing)
c.          DUE by end of class on Friday for extra points on the
exam, so you can use it to study over the weekend
(we will work on this in class W, Th, F)
Economics Bell Ringer
Thursday, 01/12/2012
1.    Elasticity of supply is very similar to elasticity of
demand. It tells us how much a producer will supply at
a specific price.
a)   Supply is always elastic in the long run (over a long time
period you can always adjust production)
b)   Supply can be elastic or inelastic in the short run (depending
c)   If a producer has inelastic supply, it means it is difficult for
them to change production based on a change in price

2.    Which do you think would have inelastic supply in the
Farmers, Taco Stand business, Beauty salon or
Subway restaurant
Economics Bell Ringer
Friday, 01/13/2011
1.    Identify the Key Term
KEY TERMS          1.   economic side effect of a good or service
1. Firm                   Externality (both positive and negative)
2. Households      2.   the study of how people make choices when supplies are
limited
3. Factors of
Economics
Production
3.   the resources that are used to make goods and services
4. Land                   Factors of Production
5. Labor           4.   organization that uses resources to produce a product or
6. Economics            service, which it then sells
7. Scarcity               Firm
5.   principle that limited amounts of goods and services are
8. Externality
available to meet unlimited wants
9. Incentive              Scarcity
10. Opportunity Cost
6.   all natural resources used to make goods and services
Land
2.    Explain the difference between the two types of capital. Is
this part of the factor or product market in the circular flow?
Physical Capital: man-made objects; Human Capital: knowledge, training, education
They are factors of production provided by households to firms in the factor market.

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