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Economics Lecture Two (view source)

Revision as of 22:45, August 17, 2009

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→‎Assignment: better question five
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4. Why do grocery stores lower the price of their fruit (such as grapes) when they have too many of that fruit and they are on the verge of rotting?  Explain by citing the downward slope of a demand curve.
 
4. Why do grocery stores lower the price of their fruit (such as grapes) when they have too many of that fruit and they are on the verge of rotting?  Explain by citing the downward slope of a demand curve.
   −
5. Suppose there is the following supply and demand for Yankees baseball tickets for opening day:
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5. When the New York Yankees built their new $1.5 billion new ballpark, they had to make a decision about how many "obstructed view" bleacher seats to include.  Due to the design of the new stadium, people sitting in those bleacher seats could see all of the field because something blocks part of their view.  Here is what the supply and demand information is for those obstructed-view seats:
    
{| class="wikitable"
 
{| class="wikitable"
 
|-
 
|-
−
|Quantity of Tickets
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|Quantity of "Obstructed-View" Tickets
 
|Demand Price/Ticket
 
|Demand Price/Ticket
 
|Supply Price/Ticket
 
|Supply Price/Ticket
 
|-
 
|-
−
|10<need to fix this>
+
|300
 +
|$10
 +
|$3
 +
|-
 +
|600
 +
|$5
 
|$5
 
|$5
−
|$1
  −
|-
  −
|20
  −
|$4
  −
|$2
   
|-  
 
|-  
−
|30
+
|900
−
|$3
   
|$3
 
|$3
 +
|$7
 
|-  
 
|-  
−
|40
+
|1000
 
|$2
 
|$2
−
|$4
+
|$9
 
|-  
 
|-  
 
|}
 
|}
   −
(A) What is the "free market" or equilibrium price for the bleacher tickets?
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(A) How many "obstructed view" bleacher seats did the New York Yankees build, based on the above data?
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<br>(B) Suppose the City of New York passes a law for a maximum price (price control) of $<> per bleacher ticket.  What do you think the effect of this law on the ticket availability will be (e.g., how easy will it be to buy these tickets)?
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<br>(B) Suppose the City of New York passed a law for a maximum price (price control) of $3 per "obstructed view" bleacher ticket.  Will the obstructed-view seats sell out under this law, and will people probably have to stand in long lines in order to buy them?  Would you oppose or support such a law, and why?
    
6.  "Time is money."  Explain.
 
6.  "Time is money."  Explain.
Aschlafly
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