Exercise demand 2011

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Exercise demand 2011

  1. 1. Exercise Demand & Supply
  2. 2. Write + or – to indicate the relationship of each determinant with demand <ul><li>Price (-) </li></ul><ul><li>Non-price factors </li></ul><ul><li>Income </li></ul><ul><li>2. Normal good (+) </li></ul><ul><li>3. Inferior good ( ) </li></ul><ul><li>4. Tastes & Preferences ( ) </li></ul><ul><li>5. Price of Substitute Good ( ) </li></ul><ul><li>6. Price of </li></ul><ul><li>Complements ( ) </li></ul><ul><li>7. Expected Price ( ) </li></ul><ul><li>8. Expected Income( ) </li></ul><ul><li>9. Number of buyers ( ) </li></ul>
  3. 3. What effect will each of the following have on the demand for bag (Inc D or Dec D and show graphically) <ul><li>The bag becomes fashionable </li></ul><ul><li>(Increase in Demand) </li></ul>D1 D2 Price Quantity
  4. 4. What effect will each of the following have on the demand for bag (show graphically) <ul><li>Income rises and bag is a normal good </li></ul><ul><li>Income declines and bag is an inferior good </li></ul><ul><li>Price of substitute good (other brand) falls </li></ul><ul><li>The price of complements (wallet) falls </li></ul><ul><li>Consumers anticipate the price of bag will be lower in the future </li></ul><ul><li>Consumers expect higher income in the coming years </li></ul><ul><li>Decrease in number of consumers </li></ul>
  5. 5. Indicate the relationship of SUPPLY with each factor -- + / - <ul><li>PRICE ( ) </li></ul><ul><li>INPUT PRICES ( ) </li></ul><ul><li>TECHNOLOGY ( ) </li></ul><ul><li>PRICE OF RELATED GOODS (Substitute) ( ) </li></ul><ul><li>EXPECTATION OF PRICE ( ) </li></ul><ul><li>TAXES ( ) </li></ul><ul><li>SUBSIDIES ( ) </li></ul><ul><li>NUMBER OF SELLERS ( ) </li></ul><ul><li>GOVERNMENT RESTRICTIONS ( ) </li></ul>PITPETNG
  6. 6. What effect will each of the following have on the supply of tomato (Inc S or Dec S and show graphically) <ul><li>A new fertilizer is available that will make the soil productive (Increase in Supply) </li></ul>S1 S2 Price Quantity
  7. 7. What effect will each of the following have on supply of tomato (show graphically) <ul><li>The price of seeds for planting tomato has increased </li></ul><ul><li>More subsidies are given to tomato farmers </li></ul><ul><li>The price of tomato is expected to decrease </li></ul><ul><li>The same farm can produce onions and tomato, and the price of onions have risen </li></ul><ul><li>Tomatoes from China are allowed by the government to enter the country and be sold in the market </li></ul><ul><li>Decrease in number of farmers. </li></ul>

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