4. The Econ
OlympicsSection 1
Three Positively
Scarcity
questions Normative
Utility PPF Growth
Chuck Norris does not own a house. He walks
into random houses and people move.
5. Section 1 Total Pts. =
In order for a resource to be scarce, it
has to be and
Limited and Desirable
6. Section 1 Total Pts. =
What are the three questions every
economy must ask itself?
What to produce, how to
produce, and for whom to produce.
7. Section 1 Total Pts. =
“Based on GDP, 51 of the 100 largest
economies in the world are corporations.”
Is this a normative statement or a positive
statement? Why?
Positive, it’s a fact.
8. Section 1 Total Pts. =
Use the numbers below to draw a
Total Utility graph and a
Marginal Utility graph.
Quantity Utility
0 0
1 9
2 17
3 22
4 25
5 24
9. Section 1 Total Pts. =
• What is the opportunity cost
of producing 600 cars?
• What does a point inside
3,000 the line signify, and a point
outside the line?
2,000
B1
1,500 1,000 Computers
Quantity of Inside – inefficient
Computers
Produced Outside – unattainable
0 Quantity of 600 800 1,000
Cars Produced
12/10/2009 9
10. Section 1 Total Pts. =
Explain the difference between
growth, development, and
sustainability.
Growth – increase in output (quantitative)
Development – increase in standard of living (qualitative)
Sustainability – balance between growth and preserving the
environment
11. The Econ
OlympicsSection 2.1
Price
Demand Supply
Ceiling
Normal vs. Minimum
Markets
Inferior Wage
When Chuck Norris wants an egg, he cracks
open a chicken.
12. Section 2.1 Total Pts. =
Give four examples of
situations when demand
could shift to the left. Price
What is the relationship
between price and quantity
demanded?
D1
Prices ↑ Qty. demanded ↓
Prices ↓Qty. demanded ↑
0 Quantity
13. Section 2.1 Total Pts. =
“A drought has destroyed
the crops!”
How will this affect supply Price
of corn?
S
Why does the supply curve
slope upwards?
Supply will first shift to the left. D
Supply has a positive relationship
with price. 0 Quantity
14. Section 2.1 Total Pts. =
Using a diagram, explain what a price
ceiling is, and what three consequences
are of doing this.
Shortages
Queuing (waiting lists)
Rations
Black markets for goods
15. Section 2.1 Total Pts. =
Name the four markets and explain
how they are different.
Monopoly – one firm
Oligopoly – a few large firms
Monopolistic competition – many medium sized
firms selling different products
Perfect competition – countless small firms selling
similar products
16. Section 2.1 Total Pts. =
What is the difference between a
normal good and an inferior good?
Give examples of each.
Normal good – as income increases, demand
increases. (Cars)
Inferior good – as income increases, demand
decreases. (Use of public transportation)
17. Section 2.1 Total Pts. =
Using a diagram, explain
what a minimum wage Price Unemployment
D S
PriceFloor
is, and what some 4
consequences are.
3
2
A minimum wage is a price
floor, and employers cannot go
below this wage. One 100 200 600 Quantityoflab
or
consequence will be
unemployment.
18. The Econ
OlympicsSection 2.2
Elasticity PED XED
YED PES Revenue
If you work in an office with Chuck Norris,
don't ask him for his three-hole-punch.
19. Section 2.2 Total Pts. =
What are three determinants of
elasticity of demand?
Time, necessity, luxury, substitutes, portio
n of income
20. Section 2.2 Total Pts. =
What does price elasticity of
demand tell us?
How sensitive the quantity demanded for
product is based on a change in the price.
21. Section 2.2 Total Pts. =
The price of product X has gone up from $2 to $3. As a
result, the quantity demanded for product Y has gone up
from 40 to 80.
What is the XED?
Are these goods complements or substitutes?
Is this elastic or inelastic and what does this tell us?
XED = 2
Substitutes
Elastic – as the price goes up for one good, the
quantity demanded for another good will go up by
a greater percentage.
22. Section 2.2 Total Pts. =
Your income increases by 3% which leads to
demand for product Y to decrease from 300
to 270 units.
What is the YED?
Is this product normal or inferior?
Is it elastic or inelastic and what does that
mean?
YED = -3.3
Inferior
Elastic
23. Section 2.2 Total Pts. =
What are two determinants of
elasticity of supply that are different
from demand?
Closeness of producer substitutes, unused
capacity
24. Section 2.2 Total Pts. =
Last year, the price for tuition at a state university
increased by 14%. As result of the price hike, the
university saw an 8% drop in student enrolment.
EVALUATE whether the university should raise
prices, or lower prices next year if it would like to
generate more revenue?
PED = .57
Increase Prices because it’s inelastic
25. The Econ
OlympicsSection 2.4
Negative Positive
Market
Externalit Externalit
Failure
y y
A Common Public
Diagrams
Tragedy Goods
Chuck Norris once participated in the
running of the bulls. He walked.
26. Section 2.4 Total Pts. =
Give an example of a market failure
caused by a negative externality.
Why is this considered a market
failure?
The recycling of computers leading to cancer in
children. This is market failure because we
don’t pay for this cost when purchasing or
supply a computer.
27. Section 2.4 Total Pts. =
Provide four examples of different
negative externalities we talked
about in class.
Noise pollution (car alarms), air
pollution, second-hand smoke, plastic bags
polluting the seas, accidents from
alcohol, poor housing
28. Section 2.4 Total Pts. =
Provide three examples of different
positive externalities we talked
about in class and explain why they
are considered market failures.
Education, beautiful
homes, vaccinations, public
transportation…society is benefiting without
having to pay the cost.
29. Section 2.4 Total Pts. =
Explain the idea of The Tragedy of
the Commons and what the solution
to this tragedy often is.
Areas that we all share and nobody owns are
often poorly taken care of and exploited. The
solution is to provide property rights to
individuals or groups to take better care of
these resources.
30. Section 2.4 Total Pts. =
Explain how we determine what a
public good is, give an example, and
explain why the market won’t
provide it.
Non-rivalrous and non-excludable. Street
lights. Too many people would benefit without
paying. (Free riders.)
31. Section 2.4 Total Pts. =
Price
£12
Look at the diagram to
the left. Label the lines.
£7
Then explain what this
£5 graph is showing.
80 100 Quantity Bought and Sold
This graph shows a negative externality. We pay a marginal
private cost for a good or service, but not the marginal
social cost.
32. The Econ
OlympicsWild Card!
Chuck
Yin Yang Billie Jean
Norris
Enrique Jessica William
Iglesias Alba Shakespeare
33. Section 1 Total Pts. = 3 pts.
WILD CARD
Life is all about balance. Don’t work too much, but don’t
just play life away. Don’t eat all sweets, but indulge from
time to time in a creamy, chocolate fudge dessert. Keeping
in mind this idea of balance, answer the following question
while balancing yourself on your hands.
What is the difference between scarcity and
shortage?
Scarcity is permanent and a
shortage is temporary.
34. Section 2.1 Total Pts. = 4 pts.
WILD CARD
One of Michael Jackson’s most popular songs was “Billie
Jean.” In honor of him and his song, dance to the first
minute of Billie Jean. If your dancing is satisfactory, then
you can answer the following question:
What does Ceteris Paribus mean and why is it
important in Economics?
All else equal – to study the change on
demand, we need to assume other things are the
same. To study how price affects demand, we
need to assume income, population, etc. stay the
same.
35. Section 2.1
Total Pts. = 4 pts.
WILD CARD
It has been said that Chuck Norris could do 100 pushups
with one hand, and memorize 100 pages of Economics at
the same time. Using Chuck Norris’ strength and mental
acuity as inspiration, do 20 pushups on your desk and then
answer the following question.
Explain the concept of “The Invisible Hand” in
Economics.
The self-regulating nature of the market. Prices will
eventually rise or fall to their correct levels naturally as
people make choices.
There are no weapons of mass destruction in Iraq, Chuck Norris lives in Oklahoma.
36. Section 1
Total Pts. = 3 pts.
WILD CARD
Enrique Iglesias is unquestionably the greatest
bilingual singer of all time. After singing the first
30 seconds of his song “Dimelo” answer the
following question:
What are the three types of economies we
discussed, and some pros and cons of each one.
Traditional
Market
Planned
37. Section 2.4 Total Pts. = 4 pts.
WILD CARD
Jessica Alba has earned her fame by developing into one
of the most skillful actresses of our time. Create a scene
where one person in your group pretends to be Jessica
Alba. The scene must include some type of negative
externality. After the scene, answer the following
question:
Explain the concept of a free rider and give an
example.
Someone who benefits from others buying
goods because those goods are non-excludable
or non-rivalrous. (A roommate buying a couch.)
38. Section 2.2 Total Pts. = 5 points
WILD CARD
William Shakespeare had a gift for words, and if rap music
had been around in the 16th century, there is no doubt he
would’ve created some phatjamz. Since he is now food for
worms, your task is to write a rap about any aspect of
Economics. Once your rap is finished, you and your group
must perform it and answer the following question:
What do the following elasticities tell us?
Ped = .8 Pes = 3.4
Yed= - 1.9 Xed = - .7
