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Economics Lecture Three (view source)
Revision as of 22:45, September 14, 2009
, 22:45, September 14, 2009→Assignment: better
1. Give an example of a good that has high price elasticity, meaning that a small decrease in price causes a big increase in demand.
1. Give an example of a good that has high price elasticity, meaning that a small decrease in price causes a big increase in demand.
2. Donald Trump makes money by "selling" the service of gambling. Donald Trump can keep increasing and increasing his price for the gambling (the losses by the players), and the addicted gamblers just keep on paying to play. Does this describe an "elastic" or "inelastic" service? Explain.
2. Explain the concept of income elasticity.
3. Explain the similarity and difference between price elasticity of demand and income elasticity.
3. A nearly perfectly elastic demand curve is nearly ________ in shape; a nearly perfectly inelastic demand curve is nearly __________ in shape.
4. A nearly perfectly elastic demand curve is nearly ________ in shape; a nearly perfectly inelastic demand curve is nearly __________ in shape.
4. '''''Why''''' is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?
5. '''''Why''''' is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?
5. What is a substitute for french fries, and what is a complement for them?
6. What is a substitute for french fries, and what is a complement for them?
6. Give an example of a "normal" good, and an example of an "inferior" good.
7. A "price ceiling" is a type of price control that sets the maximum price allowed by law for something (like a real ceiling). A "price floor" is a type of price control that sets a minimum price allowed by law for something (like a real floor). Does a price ceiling that is set below the free market price cause a surplus or a shortage? Please explain.
7. A "price ceiling" is a type of price control that sets the maximum price allowed by law for something (like a real ceiling). A "price floor" is a type of price control that sets a minimum price allowed by law for something (like a real floor). Does a price ceiling that is set below the free market price cause a surplus or a shortage? Please explain.
12. Describe and discuss how wealth is created in society.
12. Describe and discuss how wealth is created in society.
13. Should sellers of goods or services required to fully disclose to the public the harm that their goods or services causes? Discuss, providing a specific example of a harmful good or service.
13. Donald Trump makes money by "selling" the service of gambling. Donald Trump can keep increasing and increasing his price for the gambling (the losses by the players), and the addicted gamblers just keep on paying to play. Does this describe an "elastic" or "inelastic" service? Explain.
[[Category:Economics lectures]]
[[Category:Economics lectures]]
{{DEFAULTSORT: Economics Lecture 03}}
{{DEFAULTSORT: Economics Lecture 03}}