2. Apple’s iPod Video ___7. Increase in the price of Apple’s iPod Video on the Microsoft’s Zune market for Microsoft’s Zune. tealemon ___8. Increase in the price of tea on the market for lemon. taxesSUVs ___9. Increase in business taxes on the market for SUVs. Consumers expect cell phones ___10. Consumers expect a shortage of cell phones. “”[] or “ “ TRIBE ”[ D ] or “ ROTTEN” incomecamcorders ___1. Increase in income on the market for camcorders. # of consumers ___2. Increase in # of consumers on market for computers. Producer expectations ___3. Producer expectations about a price increase. Consumer expectations ___4. Consumer expectations about a price increase. producers ___5. Increase in # of producers on market for digital cameras. resource cost ___6. Increase in resource cost on the market for bagels. A A D A C D A B D A

3. incomeMicrosoft’s Zune is anormal good 1.An increase in income if Microsoft’s Zune is a normal good would: a. increase D, increase P, & increase Q.b. increase D, increase P, & decrease Q. c. increase S, increase P, & increase Q.d. decrease D, increase P, & increase Q. decrease in the price of resources 2. A decrease in the price of resources used to produce laptops will: a. increase S, increase P, & increase Q.b. increase D, increase P, & increase Q. c. decrease S, decrease P, & decrease Q.d. do none of the above buttersubstitutemargarine 3. Decrease in price of butter on the market for the substitute margarine: a. increase D, increase P, & decrease Q.b. decrease D, decrease P, & increase Q. c. decrease D, increase P, & decrease Q.d. do none of the above improvement in technology 4. An improvement in technology used to produce DVDs will: a. decrease S, increase P, & decrease Q.b. decrease S, increase P, & increase Q. c. increase S, decrease P, & increase Q.d. decrease D, decrease P, & decrease Q. decrease in the number of consumers 5. A decrease in the number of consumers for Fuzzy Wuzzies: a. decrease S, decrease P, & decrease Q.b. increase D, increase P, & increase Q. c. decrease D, decrease P, & decrease Q.d. decrease D, decrease P, & increase Q. Effect of Changes in “D” or “S” on Price and Quantity E1E1E1E1 E2E2E2E2 E1E1E1E1 E2E2E2E2 E1E1E1E1 E2E2E2E2 E2E2E2E2 E1E1E1E1

4. taste 6. A decrease in taste for Fuzzy Wuzzies would: a. increase D, increase P, & increase Q.b. decrease D, increase P, & decrease Q. c. increase S, increase P, & increase Q.d. decrease D, decrease P, & decrease Q. number of firms 7. A reduction in the number of firms producing laptops: a. increase S, increase P, & increase Q.b. increase D, increase P, & increase Q. c. decrease S, increase P, & decrease Q.d. decrease S, decrease P, decrease Q. complement 8. An increase in the price of pancakes, a complement for syrup would: a. increase D, increase P, & decrease Q.b. decrease D, decrease P, & increase Q. c. decrease D, decrease P, & decrease Q.d. do none of the above income 9. A decrease in income upon the market for spam would: a. decrease S, increase P, & decrease Q.b. decrease S, increase P, & increase Q. c. increase D, decrease P, & increase Q.d. increase D, increase P, & increase Q. Consumer expectations 10. Consumer expectations that the price of PSP will increase by 50% in the future will: a. decrease S, decrease P, & decrease Q.b. increase D, increase P, & increase Q. c. decrease D, decrease P, & decrease Q.d. decrease D, decrease P, & increase Q. Effect of Changes in “D” or “S” on Price and Quantity

5. C A C A C B D B d. increase in price of computers c. decrease in # of consumers

6. “ Increase in D ” “Decrease in D ” “Increase in S ” “Decrease in S ” computers software. ___1. Increase in price of computers on market for software. auto worker wagesautos ___2. Decrease in auto worker wages on the market for autos. PepsiCoke ___3. Decrease in the price Pepsi on the market for Coke. D ecrease in the price of computer chips on the computer market ___4. D ecrease in the price of computer chips on the computer market. fertilizerwheat ___5. Increase in price of fertilizer on the market for wheat. subsidies AIDS research ___6. D ecrease in government subsidies on market for AIDS research. incomesused clothing ___7. Increase in incomes on market for used clothing. new professional soccer ___8. A new professional soccer league is formed soccer games upon the market for soccer games. Producer expectations ___9. Producer expectations that the price of orange juice will increase 30% in 3 weeks? Consumer expectations ___10. Consumer expectations that the price of orange juice will increase 30% in 3 weeks? computersmonitors ___11. Decrease in price of computers upon market for monitors? B C C D D C D A B B D 1 D 2 (A) (B) (C) (D) D1D1D1D1 D2D2D2D2 S S S1S1S1S1 S1S1S1S1 S2S2S2S2 S2S2S2S2 DD TRIBE ROTTEN P P PP A

7. Quick Quiz #1 Last name A-M

8. S & D Quiz 1 for “Milk” S & D Quiz 1 for “Milk” increase in wages 1. M ilk workers become unionized and win an increase in wages. decrease in price of the alternative output cheese 2. A decrease in price of the alternative output cheese affect milk supply. taste 3. A negative report on the dangers of cholesterol affect the taste for milk. demand increase of 10 million consumers 4. Milk demand is affected by an increase of 10 million consumers. Cookiesa complement of milk 5. Cookies, a complement of milk, increase in demand for milk price and therefore affect the demand for milk. technological breakthrough 6. A technological breakthrough is discovered by a BL student who Ave Maria is playing discovers that cows supply more milk if Ave Maria is playing during milking. Milk producers expectmilkprices to decrease 25% 7. Milk producers expect milk prices to decrease 25% in one week. milk 8. Due to a deadly cow plague (caused by too much cow belly dancing ), milk availabilityis expected availability is expected to shrink by 50% & impact the current demand for milk. Subsidies 9. Subsidies for milk production are increased by 20 cents per gallon. price of orange juicesubstitute20% 10. The price of orange juice, a substitute for milk, increased by 20%. [ “ + or – ” ; “ D ” or “ S ” ] 5 Demand Shifters7 Supply Shifters 5 Demand Shifters 7 Supply Shifters 1. Taste - direct 1. Resource cost [wages/raw materials – INVERSE 2. Income[ normal -direct; inferior -INVERSE 2. Alternative output price changes - INVERSE 3. Market size (# of consumers–direct) 3. Technology - direct 4. E xpectations (Consumer) availability-INVERSE 4. Number of suppliers - direct future income-direct; future price-direct 5. E xpectations [producer] about future price-INVERSE future income-direct; future price-direct 5. E xpectations [producer] about future price-INVERSE 5. Related good price changes 6. Subsidies - direct [ substitutes -direct; complements -INVERSE 7. Taxes - INVERSE [ substitutes -direct; complements -INVERSE 7. Taxes - INVERSE 1. –S 2. +S 3. –D 4. +D 5. –D 6. +S 7. +S 8. +D 9. +S 10. +D [How does each situation shift the “D” or “S” curve for milk?] I love to listen to Ave Maria.

9. Quick Quiz #2

10. S & D Quiz 2 for “Milk” S & D Quiz 2 for “Milk” producers hire fewer union workers, decreasing resource cost 1. Milk producers hire fewer union workers, decreasing resource cost. increase in price of the alternative output cheese 2. An increase in price of the alternative output cheese affect milk supply. taste 3. A positive report on the benefits of milk affect the taste for milk. demanddecrease of 20 million consumers 4. Milk demand is affected by a decrease of 20 million consumers. Cookies a complement of milk 5. Cookies, a complement of milk, decrease demand for milk in price & therefore affect the demand for milk. technological breakthrough 6. A technological breakthrough is discovered by a BL student who Enya is singing discovers that cows supply more milk if Enya is singing during milking. Milk producers expectmilkprices to increase 25% 7. Milk producers expect milk prices to increase 25% in two weeks. milk 8. Due to a deadly cow plague (caused by too much cow belly dancing ), milk availabilityis expected availability is expected to shrink by 60% & impact the current demand for milk. Subsidies 9. Subsidies for milk production are decreased by 20 cents per gallon. price of orange juicesubstitute20% 10. The price of orange juice, a substitute for milk, decreased by 20%. [“+ or –”; “D” or “S”] 5 Demand Shifters (TIMER)7 Supply Shifters – (RATNEST) 5 Demand Shifters (TIMER) 7 Supply Shifters – (RATNEST) 1. Taste - direct 1. Resource cost [wages/raw materials – INVERSE 2. Income[ normal -direct; inferior -INVERSE 2. Alternative output price changes -INVERSE 3. Market size (# of consumers–direct 3. Technology - direct 4. E xpectations (Consumer) availability-INVERSE 4. Number of suppliers - direct future income-direct; future price-direct; 5. E xpectations [producer] about future price-INVERSE future income-direct; future price-direct; 5. E xpectations [producer] about future price-INVERSE 5. Related good price changes 6. Subsidies - direct [ substitutes -direct; complements -INVERSE 7. Taxes - INVERSE [ substitutes -direct; complements -INVERSE 7. Taxes - INVERSE 1. +S 2. -S 3. +D 4. -D 5. +D 6. +S 7. -S 8. +D 9. -S 10. -D [How does each situation shift the “D” or “S” curve for milk?] I love Enya.

11. Review for Demand and Supply “You da man”

12. QD 2 QD 1 PriceQD Inverse relationshi p $250.00 D Reasons For Downsloping “D” Curve Income Effect 1. Income Effect –current buyers buy more. Substitution Effect 2. Substitution Effect– new buyers now purchase. Diminishing MarginalUtility 3. Diminishing Marginal Utility - because buyers of successive units receive less marginal utility, they will buy more only when the price is lowered. Change in QD Price change 1. Price change Movement 2. Movement [up/down the demand curve] Point to point 3. Point to point [along the curve] “D”“whole curve”.“all prices” “D” refers to the “whole curve”. [“all prices”] “QD”“point on the curve” “QD” refers to a “point on the curve” “particular price.” based on a “particular price.” iPodNano

13. increases - As price increases increases …Q S also increases DirectPQS Direct relationship between P & QS P2P2P2P2 P1P1P1P1 QS 1 S 2 QS 1 QS 2 S P1P1P1P1 P2P2P2P2 S “Let’s make more.” “Take it. We are losing money.” QS 2 QS1 -As price decreases … QS also decreases

14. Helmets P “TRIBE” Tdirect Tastes [direct] R Related Good Price Changes directinverse [substitutes-direct; complements-inverse] I Incomes directinverse -Normal [direct] & Inferior[inverse] B - # of Buyers - M direct B - # of Buyers - Market Size(# of consumers) [direct] E Expectations of consumers about direct [future price-direct; future directinverse income [ direct ]; and availability [inverse]

15. “Demand Shifters” [TRIBE] 1. Taste [direct] 2. Related Good *Prices [substitutes-direct] [complements-inverse] 3. Income [normal-direct] [inferior-inverse] 4. Buyers # - Market Size [number of consumers-direct, 5. Expectations [of consumers about future *price-direct about future availability-inverse, or about future income–direct. ] about future availability-inverse, or about future income–direct. ] Changes in “D” [curve] 1. Non price change [“TIMER”] 2. Whole “D” curve shifts [There is a change in “QD” but it is not caused by a change in “price.” QD-”single price”D-”all prices” [QD-”single price”; D-”all prices”] Complement [ inverse ] Substitute [ Direct ] Butter Bread Bagels P D3D3D3D3 D1D1D1D1 D3D3D3D3 QD 3 QD 1 QD 2 D1D1D1D1 D2D2D2D2 P P1P1P1P1 QD 1 QD 2 P2P2 D1D1D1D1 D2D2D2D2 D P

16. Q o $5 4 3 2 1 PQDQD $5 4 3 2 1 10 20 35 55 80 Price Quantity of Corn CORN Plot the Points 10 20 30 40 50 60 70 80 GRAPHING DEMAND [“Change in QD”]

17. $100 $90 $80 $70 $60$50 $40 $30 $20 $10 0 406075120 160 180200 20 40 60 75 100 120 140 160 180 200 220 Quantity (units of any good or service) 70 175 120 =120 QD=QS E QD QS QD QS QS QD QS QD D S Price Floor Surplus Price Ceiling Shortage DollarPrice If QS>QD; Price Decreases If QS<QD; P rice Increases If QD=QS; Price S tays S ame

18. Change in “Supply” [Curve] ROTTEN 1. “Non-price change” [ROTTEN 2. Whole supply curve “shifts” [There was a QS change but it was not caused by a change in price]. Broccoli “ Suppliers produce smaller/ larger quantities at each price.” “Substitutes in production” I only have 200 acres S1S1S1S1 S Corn S1S1S1S1 P S2S2S2S2 QS1 QS2 Alternative Output Price Change [INVERSE] QS 1 QS 1 P2P1P2P1 P S1S2S1 S2S1S2S1 S2 [new football league- bigger “S ” of games ] Don’t confuse these two with Chg in QS. QS 2 QS 3 S3S3S3S3 S2S2S2S2 P

19. Four Possibilities D1D1D1D1 D1D1D1D1 S A B C D Increase in supply of gas Slide Rule After introduction of calculator S D1D1D1D1 D2D2D2D2[TRIBE][ROTTEN] “D” for flag after 9/11 “Increase in Demand” “Decrease in Demand” “Increase in Supply” “Decrease in Suppy” D ecrease in “S” of gas D P Q D P Q S QP P S Q D S1S1S1S1 D S1S1S1S1 S2S2S2S2 $1.85 $1.00 Q 1 Q 2 Q 1 Q 2 Q 2 Q 1 $1.85 S1S1S1S1 $1.00 P2P2P2P2 P1P1P1P1 P1P1P1P1 P2P2P2P2 Q 1 Q 2 Q 2 Q 1 After “Looking For Nemo”

20. “Change in QD” “Change in QS” “Change in Demand” “Chg in Supply” Non-Price Change Whole Curve Shifts [What is not held constant in these 4?] Price Change Point to Point Movement [INVERSE][INVERSE][INVERSE][INVERSE] [DIRECT] P1P1P2P2P1P1P2P2 P2P2P1P1P2P2P1P1 QD 1 QD 2 D S QD 2 QD 1 QS 1 QS 2 QS 2 QS 1 P1P1P2P2P1P1P2P2 P2P2P1P1P2P2P1P1 S D1D1 D2D2D2D2 D1D1D1D1 D2D2D2D2 S1S1S1S1 S2S2 S2S2S2S2 S1S1S1S1 Q 1 Q 2 Q 2 Q 1 Q 1 Q 2 Q 2 Q 1

21. Price Changes for Substitutes & Complements Subs - Direct Dr Pepper Complements - Inverse Coke P1P1P2P2P1P1P2P2 P1P1P2P2P1P1P2P2 QD 1 QD 2 D D D1D1D1D1 D2 D1D1D1D1 D2D2D2D2 Alternative Outputs - Inverse S S1S1 S2S2S2S2 P1P1P1P1 P2P2P2P2 P QS 2 QS 1 Broccoli Corn Helmets Motorcycles P P

22. “ Increase in D ” “Decrease in D ” “Increase in S ” “Decrease in S ” printers cartridges. ___1. Decrease in the price of printers on the market for cartridges. worker wagescomputers ___2. Increase in worker wages on the market for computers. Dr. PepperCoke ___3. Increase in the price Dr. Pepper on the market for Coke. In crease in the price of computer chips on the computer market ___4. In crease in the price of computer chips on the computer market. fertilizerwheat ___5. Decrease in price of fertilizer on the market for wheat. subsidies AIDS research ___6. In crease in government subsidies on the market for AIDS research. incomesused clothing ___7. Decrease in incomes on the market for used clothing. New professional hockey ___8. New professional hockey league is formed hockey games upon the market for hockey games. Producer expectations ___9. Producer expectations that the price of orange juice will decrease 30% in 3 weeks? Consumer expectations ___10. Consumer expectations that the price of orange juice will decrease 30% in 3 weeks? computersmonitors ___11. Decrease in price of computers upon market for monitors? A D D C C C C B A A D 1 D 2 (A) (B) (C) (D) D1D1D1D1 D2D2D2D2 S S S1S1S1S1 S1S1S1S1 S2S2S2S2 S2S2S2S2 DD TRIBE ROTTEN P P PP A

23. incomespam 1.A decrease in income if spam is an inferior good would: a. increase D, increase P, & increase Q.b. increase D, increase P, & decrease Q. c. increase S, increase P, & increase Q.d. decrease D, increase P, & increase Q. increase in the price of resources 2. An increase in the price of resources used to produce DVD Players will: a. increase S, increase P, & increase Q.b. increase D, increase P, & increase Q. c. decrease S, decrease P, & decrease Q.d. decrease S, increase P, & decrease Q. buttermargarine 3. Decrease in price of butter on the market for the substitute margarine: a. increase D, increase P, & decrease Q.b. decrease D, decrease P, & increase Q. c. decrease D, increase P, & decrease Q.d. do none of the above improvement in technology 4. An improvement in technology used to produce DVDs will: a. decrease S, increase P, & decrease Q.b. decrease S, increase P, & increase Q. c. increase S, decrease P, & increase Q.d. decrease D, decrease P, & decrease Q. increase in the number of consumers 5. An increase in the number of consumers for Fuzzy Wuzzies: a. decrease S, decrease P, & decrease Q.b. increase D, increase P, & increase Q. c. decrease D, decrease P, & decrease Q.d. decrease D, decrease P, & increase Q. Effect of Changes in “D” or “S” on Price and Quantity

24. taste 6. An increase in taste for Fuzzy Wuzzies would: a. increase D, increase P, & increase Q.b. decrease D, increase P, & decrease Q. c. increase S, increase P, & increase Q.d. decrease D, decrease P, & decrease Q. number of firms 7. A reduction in the number of firms producing laptops: a. increase S, increase P, & increase Q.b. increase D, increase P, & increase Q. c. decrease S, increase P, & decrease Q.d. decrease S, decrease P, decrease Q. pancakescomplementsyrup 8. A decrease in the price of pancakes, a complement for syrup would: a. increase D, increase P, & decrease Q.b. decrease D, decrease P, & increase Q. c. Increase D, increase P, & increase Q.d. do none of the above incomeused cars 9. An increase in income upon the market for used cars would: a. decrease S, increase P, & decrease Q.b. decrease S, increase P, & increase Q. c. increase D, decrease P, & increase Q.d. decrease D, d ecrease P, & decrease Q. Consumer expectations 10. Consumer expectations that the price of Nintendo DS will increase by 50% in the future will: a. decrease S, decrease P, & decrease Q.b. increase D, increase P, & increase Q. c. decrease D, decrease P, & decrease Q.d. decrease D, decrease P, & increase Q. Effect of Changes in “D” or “S” on Price and Quantity

25. B D C B D A C A d. increase in price of Sevens c. increase in # of consumers 7 Revised of the Zune for the Zune

26. Practice “Supply Quiz” “decrease in supply” 1. Which would cause a “decrease in supply” for MP3 Players? a. decrease in the price of MP3s b. increase in the price of MP3s c. decrease in MP3 resource cost d. producer expectations of a price increase “decrease in QS” 2. Which would cause a “decrease in QS” for MP3s? a. decrease in the price of MP3s b. increase in the price of MP3s c. decrease in MP3 resource cost d. producer expectations of a price increase “increase in supply” 3. Which would cause an “increase in supply” for MP3 Players? a. decrease in the price of MP3 Players b. increase in the price of MP3s c. decrease in MP3 resource cost d. producer expectations of a price increase “increase in QS” 4. Which would cause an “increase in QS” for MP3s? a. decrease in price of MP3s b. increase in price of MP3s c. decrease in MP3 resource cost d. producer expectations of a price increase 5. An increase in the price of asparagus will (increase/decrease) alternative output the supply of the alternative output peas. “computer chips” 6. A 50% decrease in the price of “computer chips” will “computers”. (increase/decrease) the (supply/QS) for “computers”. “increase in supply” 7. Which would cause an “increase in supply” for MP3 Players? a. increase in wages for MP3 Player workers. b. subsidies($100 per computer) are given to MP3 Player companies. c. subsidies for MP3 Player makers being taken away.