October 22, 2007

Unit 2 Exam

Posted in Basic Economic Concepts, elasticity, Price Ceilings, Price Floors, Supply & Demand at 4:36 pm by davidprudente

The Unit 2 exam on issues relating to supply and demand will be tomorrow (10/23). The exam will consist of Twenty-five multiple choice questions and one multi-part free response question. As I mentioned in class, you need to know what factors will shift the supply and demand curves; how to determine elasticity; and how a price ceiling and price floor effect markets.

Be sure you use your textbook, notes, Barron’s study guide, and the on-line resources available to you to prepare for the exam. Good luck.

October 10, 2007

Chapter 5 HW Questions

Posted in Assignments, elasticity, Supply & Demand at 3:36 pm by davidprudente

Problems 2 & 3 are due tomorrow (10/11/07).

Also, I mentioned the Apple “1984” advertisement in some of my classes today. I’m posting it below as many of you have never seen (or heard) about it.

Also, check out this article about Radiohead’s new album, “In Rainbows” due out this week. They are offering the album for download on their web site. The interesting thing is, that the band is telling their fans to pay what they want for the album.

Radiohead

As economics students you should be able to predict what is going to happen here. Will this be a new “economic model” as the band thinks, or will many buyers just simply download the songs for free? Will enough buyers pay enough for this album that they subsidize all of the “free-riders”? I guess we’ll have to wait and see.

October 9, 2007

Elasticity

Posted in elasticity at 4:04 pm by davidprudente

As we learn about elasticity, think about what makes products necessities or luxuries. Have you ever said “I have to have that!” about something, when in fact you didn’t really need it?

Advertising can effect elasticiy of demand. (You wont find this stuff in your text book or on the AP Exam.) Here’s an example from Molson of an ad that has decreased the price elasticity of demand by appealing to people’s sense of belonging.

Would you think that Molson is an elastic or inelastic product? How can advertising influence whether a product has elastic or inelastic demand?

Thanks to all the other AP Bloggers (Jason Welker, Ms. Stephens) for the pointer.