The Guts of Demand:
Elasticity, Utility, and Surplus
Day Date In class Homework
0 Go over Supply and Read, highlight, and annotate Gwartney pp. 59-60,
Demand test. and 425-430.
REVIEW SPIRAL: STANDARD PPC and 2 PPC
TRADE MODEL; PRICE SHIFTS FROM EQULIBRIUM;
and SUPPLY and DEMAND SHIFTS.
1 A very snappy topic: when Complete the worksheet, “Price Elasticity of
“Q” changes a lot even Demand I.”
though “P” only went up a Read, highlight, and annotate Mankiw, Principles of
little- elasticity. Economics, 94-96.
Read, highlight, and annotate Gwartney pp. 66-68,
432, and 482-483.
Read, highlight, and annotate Gottheil,
Microeconomics, pp. 81-84.
2 Firms using elasticity as a Complete the worksheet, “Price Elasticity of
tool: Demand II.”
Pricing for profit using price Complete worksheet, “Price Elasticity of Supply.”
elasticity of demand. Read, highlight, and annotate Gottheil pp. 76-81.
When firms need to sell: REVIEW SPIRAL: PRICE ELASTICITY OF DEMAND-
inelastic supply. FORMULA, RANGE OF CURVES, RANGE ALONG A
DEMAND CURVE, and TR.
3 Is a PC a substitute for or a Complete the worksheet, “Elasticities.”
complement of DVDs? Read, highlight, and annotate Friedman’s, Hidden
Cross- price elasticity offers Order: The Economics of Everyday Life, pp. 41-53.
What the heck is an inferior
4 Which shall bring more Finish the worksheet, “A Dry Run With Rational
utils: crackers or cookies? Choice Theory.”
Read, highlight, and annotate Gwartney pp. 419-
5 The mathematics of Complete the worksheet, “Marginal Utility
crackers and cookies: Problems.”
Rational Choice Theory and Read, highlight, and annotate Gwartney pp. 57-59.
the Rule of Utility
6 For every choice benefits Complete the worksheet, “Consumer Surplus.”
must exceed costs so, what Read, highlight, and annotate Gwartney pp. 66.
is the extra benefit called? Read, highlight, and annotate Friedman pp. 54-60.
No, it is not the same thing REVIEW SPIRAL: OTHER ELASTICITIES and
as utility (it is only part of UTILITY MAXIAMIZATION.
7 A synonym for profit, Complete the worksheet, “Producer Surplus.”
producer surplus. Read, highlight, and annotate Gwartney pp. 72-73,
REVIEW SPIRAL: CONSUMER SURPLUS and
8 A taxing subject: Complete the worksheet, “Tax Burden and
Using surpluses to Deadweight Loss.”
determine the efficiency REVIEW SPIRAL: TAX BURDEN.
impact and burden of
9 Review problems. Study: the concepts (elasticities, utility maximization,
and surpluses), the models, and the vocabulary.
10 The test: 50% on multiple- Next calendar.
choice, and 50% on two