2015 day 7

On slates1. If you could attend any college in the US

where would it be?2. Why did you pick that college?

3. Do you think college is too expensive?4. What 2 things would happen if the state

of AZ lowered the price of college classes to $50 per class?

In your notesFind the equilibrium price of 1 roll of toilet

paper

Price Quantity Supplied

Quantity DemandedPrice

$0.50$ 1.00$ 1.75$ 2.25$ 3.00

1003007009001500

$ 0.25$ 0.50$ 1.00$ 2.25$ 3.00

1500900600400300

0

0.25

0.5

0.75

1

1.25

1.5

1.75

2

2.25

2.5

2.75

3

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500

2. Why might a politician argue this isn’t a fair

price for large families?

Toilet paper

0

0.25

0.5

0.75

1

1.25

1.5

1.75

2

2.25

2.5

2.75

3

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500

D

S

P

Q

At your tablesSay the government, to help large families, made it illegal for the price to be higher than $0.50 per roll.1. What would happen to the amount of toilet paper people

would want to buy?2. What would happen to the amount of toilet paper producers

would want to sell?3. What would happen to the number of sheets per roll?4. What would happen to the texture of the toilet paper?5. What other markets might be effected? (paper products?)6. Who would get first chance at buying the toilet paper?7. What would happen to the level of corruption in the country?

Toilet paper

0

0.25

0.5

0.75

1

1.25

1.5

1.75

2

2.25

2.5

2.75

3

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500

D

SP

Q

Surely no country would try this….

Price CeilingDesigned to help

consumersIllegal to charge higher than the

priceExample:

Venezuela TPProblems?

Quality Shortages

Price CeilingDesigned to help

consumersIllegal to charge

higher than the priceExample: Rent

ControlsProblems?

QualityShow rent control

clip

Hand out worksheet

On slates

1. List 4 jobs you could do without any special skills

2. List 4 jobs you could do that require skills, licenses or education

Types of labor• Skilled labor: require skills, licenses or

education• Salary?• Give 3 examples

• Unskilled labor: lower human capital, physical, entry level

• Salary?• Type of person?• Give 3 examples

Who are you right now? In 10 years?

Students, low skilled immigrants, uneducated

Professionals, skilled immigrants, educated

Germany lacks a min wage

Around the World

Conclusion?

Minimum Wage Graph• Price floor on unskilled labor market• Subway test, • $5/hour• $7/hour, • $10/hour,• $15/hour, • $25/hour,

Minimum Wage assignment• Read both articles• Identify 2 main ideas from each side• Write a 2 paragraph letter to your

congressman asking them to vote FOR or AGAINST the $15/minimum wage

Walter WilliamsElizabeth Warren

Congressman Grijalva

Outline: PG 1 – intro/background

debate sides, main ideas

PG 2 – How do you think they should vote? Support with economic ideas

Congresswoman….

Exam Review

1. Why do you think companies would rather sell products with

an inelastic demand? (hint look at the Y-axis of your graph)

What is the price when this market is at equilibrium?

A. Around 33B. Around $ 3.25C. Around $ 2.25D. Around p *

P

Economists would describe this demand curve as:

A. elasticB. inelasticC. quantityD. inferior

How many more goods will this company sell if they lower the price from $1 to $0.75?

A. 3B. 6C. 9D. 12

Which of the following goods would most likely have this sort of demand?

A. Toilet paperB. Hot cheetosC. Water on a 110+

degree dayD. Lifesaving drugs

Economists would describe this demand curve as:

A. elasticB. inelasticC. quantityD. inferior

Which good matches this demand curve?

A. Rims for a truckB. hamburgersC. Plastic surgeryD. Water on a 110+

degree day

How many FEWER goods would this company sell if they raised their price from

$0.50 to $1?

A. 4B. 3C. 2D. 1

Tickets to the movies have a more elastic demand curve, so if a company wanted to increase their revenue, they should:A. Raise their priceB. Lower their priceC. Keep their price the sameD. Consider the substitutes

Lifesaving, pharmaceutical drugs have an inelastic demand curve, so if a company wanted to increase their revenue, they

should:

A. Raise their priceB. Lower their priceC. Keep their price the

sameD. Consider the

substitutes

What probably caused this change?

A. Bus ridership increases

B. New car sales decline

C. Unemployment decreases

D. Consumers buy more SUV’s

GasolinePrice

Quantity

What probably caused this change?

A. Price of pizza increased

B. Population of Tucson decreased

C. Price of soda increased

D. Average income in Tucson decreased

Tacos

What probably caused this change?A. Price of new

clothing decreased

B. Population of Tucson decreased

C. Price of used clothing increased

D. Average income in Tucson decreased

Used Clothing

What probably caused this change?

A. Bus ridership increases

B. Tablet computer sales increase

C. Unemployment decreases

D. Pencil prices decrease

Notebook paperPrice

Quantity

What probably caused this change?A. Average income in

Tucson decreasedB. Population of

Tucson decreasedC. Price of Pepsi

decreasedD. Price of Coke

increased

Pepsi

What probably caused this change?A. Average

income in US decreased

B. Number of new brokerage accounts triples in US

C. Sales of iphone decline

D. Sales of Blackberry’s increase

Shares of Apple stock

What is the price when this market is at equilibrium?

A. Around 40B. Around $ 6 C. Around $ 3D. Around $ 30

P

Q

S

D

Widgets

How many widgets will be supplied in this market when the price is $8?

A. Around 40B. Around 50C. Around 30D. Around $ 30

P

Q

S

D

Widgets

What might explain this change?A. Average US

income increased

B. Average US income decreased

C. Population of US decreases

D. New car company begins operation

Q

S

D

WidgetsNew cars

Based on the change in this graph, which outcome is true?

A. Price of cars will increase

B. Price of cars will decrease

C. There will be no change

D. Quantity of cars will decrease Q

S

D

WidgetsNew cars

Based on the change in this graph, which outcome is true?

A. Two car companies merge

B. A new Korean car company begins selling cars in the US

C. Price of oil increases

D. Price of steel increases

Q

S

D

WidgetsNew cars

New carsS

D

Based on the change in this graph, which outcome is true?

A. Price of cars will increase

B. Price of cars will decrease

C. There will be no change

D. Quantity of cars will decrease

Q

S

D

WidgetsNew cars

New carsS

D

Based on the change in this graph, which outcome is true?

A. Car companies think price of cars will decline next year

B. Demand for new cars increased

C. Wages of autoworkers decreased

D. Wages of autoworkers increased

Q

S

D

WidgetsNew cars

New carsS

D

New cars

Which graph shows the effect of an increase in immigration on the used car market?

A. Graph AB. Graph BC. Graph CD. Graph D

Graph A

Graph B

Graph D

Graph C

Which graph shows the effect of more expensive gasoline on SUV’s?

A. Graph AB. Graph BC. Graph CD. Graph D

Graph A

Graph B

Graph D

Graph C

Which graph shows the effect of a decrease in the price of jet fuel on the airline ticket market?

A. Graph AB. Graph BC. Graph CD. Graph D

Graph A

Graph B

Graph D

Graph C

Which graph shows a decrease in equilibrium price and an increase in quantity?

A. Graph AB. Graph BC. Graph CD. Graph D

Graph A

Graph B

Graph D

Graph C

Which will probably happen after the US Airways/American Airlines merger?A. Lower pricesB. Higher pricesC. No changeD. They will become

an inferior good

Which will probably happen if the price of jet fuel declines to the price of airline tickets??A. Lower pricesB. Higher pricesC. No changeD. They will

become an inferior good

Which graph shows the effect of a decrease in income taxes on the airline ticket market?

A. Graph AB. Graph BC. Graph CD. Graph D

Graph A

Graph B

Graph D

Graph C

Smartphone market: Blackberry files for bankruptcy

A. Prices increase

B. Prices decrease

C. No changeD. Quantity will

increase

Smartphone market: plastic prices double

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

increase

Smartphone market: Data plan prices increase

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

increase

Smartphone market: Producers expect the price of smart phones to drop next year

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

decrease

Smartphone market: New iphone commercials featuring Pittbull

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

decrease

Flatscreen tv market: trade agreements allow producers to use cheaper labor in South Korea

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

decrease

Flatscreen tv market: Producers expect the price of TVs to decline next year.

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

decrease

Apartment market: Consumers start buying houses again due to bull market

A. Prices increaseB. Prices decreaseC. No changeD. Quantity will

increase