Limited time offer 20% OFF StudySoup Subscription details

W&M - ECON 101 - Class Notes - Week 9

Created by: krapnahtan Elite Notetaker

> > > > W&M - ECON 101 - Class Notes - Week 9

W&M - ECON 101 - Class Notes - Week 9

School: The College of William & Mary
Department: Economics
Course: Microeconomics
Professor: Katie Lopresti
Term: Fall 2016
Tags: Microeconomics
Name: ECON 101-02 Week 9 Mar 19-23
Description: These notes cover the in-class lecture of Dr. LaSalvia's Principles of Microeconomics class of the Spring 2018 semester.
Uploaded: 03/24/2018
This preview shows pages 1 - 2 of a 6 page document. to view the rest of the content
background image Monday March 19  Price and quantity (P & Q) are consequences of the market. 
P & Q = 
f ( supply demand   ^ This graph tells us that the  position ​of supply and demand ​matters.   Position is affected by…   Supply ​:​  Price of inputs, productivity, direct supply shocks (boils down to cost of  production).  Demand ​: ​ Income, price of other goods, preferences (boils down to willingness and ability  to pay).  ○ “Bang for the buck” idea.  P & Q are a function of all these things  → ΔP & ΔQ =  f (Δall these things).    Type of shift  ΔP  ΔQ  1) Outward supply shift  Price goes down. (P↓)  Quantity goes up. (Q↑)  2) Inward supply shift  Price goes up. (P↑)  Quantity goes down. (Q↓)  3) Outward demand shift  Price goes up. (P↑)  Quantity goes up. (Q↑)  4) Inward demand shift  Price goes down. (P↓)  Quantity goes down. (Q↓)  1) + 3) Outward S&D shift  ? (ambiguous price change)  Quantity goes up. (Q↑)  1) + 4) Outward S and inward 
D shift 
Price goes down. (P↓)  ? (ambiguous quantity 
change) 
2) + 3) Inward S and outward 
D shift 
Price goes up. (P↑)  2) + 4) Inward S&D shift  Quantity goes down. (Q↓) 
background image This table reveals…   ● No ambiguity (?) with only one shift (no question marks in rows 1-4).  ○ Ambiguity in rows with combined shifts. Magnitude of the shifts are important.  ȠMarket Analysis: Bacon  ǿShock: ​Government regulations force farmers to keep pigs in lower density pig pens → cost 
of production increases → 
inward supply shift.  ● People realize that pigs are being treated more humanely → increase in willingness to  pay for bacon →  outward demand shift.    Price increases and, depending on magnitude of  demand shift,  quantity either decreases or  increases.   ● Relative magnitudes.   vs.  ----------→    
ʞ​Shock: ​Minimum wage increases for processing line for bacon → increase cost of 
production.  
● If we assume  normal​, we get ​outward ​demand shift.   ● If we assume  inferior​, we get ​inward ​demand shift.     

This is the end of the preview. Please to view the rest of the content
Join more than 18,000+ college students at The College of William & Mary who use StudySoup to get ahead
6 Pages 15 Views 12 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!
Join more than 18,000+ college students at The College of William & Mary who use StudySoup to get ahead
School: The College of William & Mary
Department: Economics
Course: Microeconomics
Professor: Katie Lopresti
Term: Fall 2016
Tags: Microeconomics
Name: ECON 101-02 Week 9 Mar 19-23
Description: These notes cover the in-class lecture of Dr. LaSalvia's Principles of Microeconomics class of the Spring 2018 semester.
Uploaded: 03/24/2018
6 Pages 15 Views 12 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!
Join StudySoup for FREE
Get Full Access to W&M - ECON 101 - Class Notes - Week 9
Join with Email
Already have an account? Login here
×
Log in to StudySoup
Get Full Access to W&M - ECON 101 - Class Notes - Week 9

Forgot password? Reset password here

Reset your password

I don't want to reset my password

Need help? Contact support

Need an Account? Is not associated with an account
Sign up
We're here to help

Having trouble accessing your account? Let us help you, contact support at +1(510) 944-1054 or support@studysoup.com

Got it, thanks!
Password Reset Request Sent An email has been sent to the email address associated to your account. Follow the link in the email to reset your password. If you're having trouble finding our email please check your spam folder
Got it, thanks!
Already have an Account? Is already in use
Log in
Incorrect Password The password used to log in with this account is incorrect
Try Again

Forgot password? Reset it here