Here is the link for the animated gif file for the determinants of supply: http://www.reffonomics.com/determinatesofsupply.html
Some questions for you - ideas for discussion. And please feel free to answer others, too!
Post your own questions from class if you want!
1. Give one example from actual firms or industries for each of the factors that cause a change in supply.
2. Why does the supply curve slope upwards?
And some supply & demand questions:
3. If you were a seller, why would you want to limit supply - either by keeping out new market entrants or by establishing production quotas? Why would you hate that if you were a consumer?
4. If marijuana were legalized, what would happen to the supply and demand curves for the drug?
Always make sure to explain your answers! :)
3 comments:
Cherie & Jacqui - let me know if the explanation in the new post is not enough to explain the assignments. :)
Funny...it made me want apple pie...
Jon - excellent link! Everyone - go look at it!
We haven't gotten to elasticity yet, but the basic idea of elasticity of demand means that if a good is a necessity (as it is for a drug addict), then even if the price goes sky high, they will still buy it.
Most economists would argue that demand would drop if drugs became legalized. Also, the idea of what drug pushers would do has to come into it. If it wasn't illegal, would it hold the same allure? How many 22-30 year olds get trashed as often as those underage?(the numbers might surprise you)
Jon asked me something at the beginning of class today - what happened at the end of Prohibition when liquor was readily available again? Did the demand rise? Did the price drop dramatically - was that due to supply or demand? Same issue.
What do you think?
3. bye keeping limiting supply, you can keep prices higher because keeping out market entrants, you are able to set the price at whatever you want. obviously consumers hate this because of the increase in prices.
4. if marijuana were legalized the number of suppliers would definitely increase, therefore shifting the supply curve to the right. The demand curve would also shift because of the change in preference, since it is now legal to smoke it, more people will be willing to smoke it.
(does this count as two posts?)
Post a Comment