understand the market and allocative efficiency
DESCRIPTION
Another active learning strategy brought to the heaps cool economics students at wellington college by the douceinator. 3.2. Understand the market and allocative efficiency. In Econland. Instructions stand behind your desk challenges will be shown on the screen - PowerPoint PPT PresentationTRANSCRIPT
Another active learning strategy brought to the heaps cool economics students at wellington college by the douceinator
Instructions
1.stand behind your desk2.challenges will be shown on the screen3.answer by following instructions 4.if your answer is incorrect sit down5.challenges are repeated until there is
only one student remaining6.the last person remaining standing is
the class survivor
Lets Start
The production possibility curve/frontier shows the maximum output combination of two goods that can be produced with existing resources and technology
HAND UP HAND DOWNcorrect incorrect
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
the slope of the PPC shows opportunity cost
HAND UP HAND DOWNtrue false
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
the bowed PPC shape is caused by
HAND UP HAND DOWNdiminishing constant returns returns
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
all points on the PPC line are
HAND UP HAND DOWN
allocative productionefficient efficient
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
the production of which type of good will increase a country’s future productive capacity?
HAND UP HAND DOWN
capital goods consumer goods
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
industries which are losing their importance in the economy are known as:
HAND UP HAND DOWN
sunrise sunset industries industries
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
diminishing returns can only occur in the
HAND UP HAND DOWNlong run short run
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
if a price is set above the market equilibrium, which of the following is created?
HAND UP HAND DOWN
a shortage a surplus
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
a decrease in demand results in:
HAND UP HAND DOWN
fall in equilibriumrise in equilibriumprice price
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
the triangle area between the demand curve and the price line is called the: HAND UP HAND DOWN
producer consumer surplus surplus
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
The point on the graph where there is neither a shortage or a surplus is called: HAND UP HAND DOWN
market allocativeequilibrium efficiency
both answers are correct
TRICKED YAR!!
stay standing
After the introduction of a sales tax, the consumer surplus gets smaller
HAND UP HAND DOWN
false true
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
deadweight loss only occurs when the government intervenes in the market
HAND UP HAND DOWN
true false
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
in the midpoint formula for calculating price elasticity of demand, the change in quantity demanded is on the:
HAND UP HAND DOWN
top line bottom line
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
when the price elasticity of demand coefficient is greater than one, demand is
HAND UP HAND DOWN
inelastic elastic
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
at high prices, price elasticity of demand tends to be more
HAND UP HAND DOWN
elastic inelastic
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
perfectly elastic demand is
HAND UP HAND DOWN
horizontal vertical
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If a firms Total Revenue falls after they increase the price of their product, the demand for their product is:
HAND UP HAND DOWN
elastic inelastic
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
The government will raise more revenue is they put a sales tax on goods that are:
HAND UP HAND DOWN
elastic inelastic
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
The incidence of a sales tax on an inelastic product falls more heavily on the
HAND UP HAND DOWN
consumer producer
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
The following are characteristics of what kind of elasticity:
addictive, few substitutes, necessities
HAND UP HAND DOWN
elastic inelastic
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the response to a given change in price is a less than proportionate change in quantity demanded, then the products demand is
HAND UP HAND DOWN
inelastic elastic
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the cross elasticity of demand coefficient is negative, then the two goods are
HAND UP HAND DOWN
complements substitutes
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If two goods are substitutes and the price of one good goes up, the demand for the other good will
HAND UP HAND DOWN
shift left shift right
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
Quantity demanded of one product falls and this causes the demand curve for another product to shift left. The cross elasticity of demand coefficient must be
HAND UP HAND DOWN
negative positive
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
which of the following are likely to have a negative cross elasticity of demand?
HAND UP HAND DOWN
vegemite vegemiteand toast and marmite
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the income elasticity of demand coefficient for a good is negative, then the good is an
HAND UP HAND DOWN
inferior good normal good
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If quantity demanded and income changes are in the same direction, then the good is
HAND UP HAND DOWN
normal inferior
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
if the income elasticity of demand coefficient for a good is greater than one, then the good is a HAND UP HAND DOWN
normal luxury normal necessity
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
the perfectly inelastic supply curve is
HAND UP HAND DOWN
vertical horizontal
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the coefficient of price elasticity of supply is less than one, then the supply is
HAND UP HAND DOWN
elastic inelastic
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
supply in the short run tends to be more
HAND UP HAND DOWN
inelastic elastic
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
the momentary supply curve (supply on a given day) is
HAND UP HAND DOWN
vertical horizontal
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the response to a given change in price is a more than proportionate change in quantity supplied, then the supply is
HAND UP HAND DOWN
elastic inelastic
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
The current dollar value of a wage adjusted for changes in the price level is called
HAND UP HAND DOWN
real wage nominal wage
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the current wage rate is below the equilibrium wage rate then which of the following occurs in the labour market?
HAND UP HAND DOWN
shortage of excess labourlabour
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
the current dollar value of a wage adjusted for changes in the price level is called
HAND UP HAND DOWN
real wage nominal wage
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
If the real wage rate increases, then the amount of voluntary unemployment
HAND UP HAND DOWN
decreases increases
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
A minimum wage causes unemployment to
HAND UP HAND DOWN
decrease increase
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
If NZ goods are exported overseas, then the domestic price
HAND UP HAND DOWN
falls rises
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
NZ will import a good if its price is lower than the domestic price
HAND UP HAND DOWN
false true
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
The world supply curve is horizontal because
HAND UP HAND DOWN
the world can supply NZ importersunlimited quantity want to raiseat this price the price
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
if demand is elastic, the greater incidence of a sales tax falls on the
HAND UP HAND DOWN
consumer producer
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
If a good has inelastic demand, and the government introduces a subsidy, then the greater incidence falls on the
HAND UP HAND DOWN
consumer producer
if your hand is down
YOU HAVE BEEN VOTED OFF
sit down
A deadweight loss is always created when the government pays subsidies to firms
HAND UP HAND DOWN
incorrect correct
if your hand is up
YOU HAVE BEEN VOTED OFF
sit down
THE
END
Challenge 1
write down the 3 forumulas for determining price elasticity of demand
Challenge 2
demonstrate how the PPC shows
• scarcity• choice• opportunity cost• unemployment• diminishing returns
Challenge 3
draw a demand and supply curve and label
• allocative efficiency point• shade consumer surplus• shade producer surplus
Challenge 4
draw a graph that shows a deawweight loss occuring and explain it
Challenge 5
draw 3 supply curves and show which is
• most inelastic• more elastic• monentary supply
Challenge 6
draw the labour market showing no involuntary unemployment
Challenge 7
Draw and label the labour market showing no volunatary unemployment
Challenge 8
draw and label a supply and demand graph showing the producer incidence and producer incidence of a sales tax for an elastic good
Challenge 9
Draw and label a demand and supply curve showing consumer and producer incidence of an inelastic good after a sales tax is imposed
Challenge 10
1.Draw and label a supply and demand graph showing a subsidy.
2.Shade the consumer and producer incidence
3.shade the total cost of the subsidy to the government
4.shade the DWL
Challenge 11
1.draw a graph showing supply and demand for sheep in NZat a low price
2.draw a graph showing supply and demand for sheep at a higher price in Canada
3.show what will happen under free trade