econ101w0708 - Introductory Economics Economics 101-300...

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(c) Sherrie A. Kossoudji Introductory Economics Economics 101--300 Lecture # 8 Sherrie A. Kossoudji If you print the preliminary version of these slides before class, please be aware that they are likely to change right up to class time.
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(c) Sherrie A. Kossoudji Please remember that reading these slides does not substitute for attending class. These slides are merely outline guides for what is discussed during the lecture.
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(c) Sherrie A. Kossoudji Schedule: Week 5 WEEK 5: WEEK OF JANUARY 29TH Lecture #: 8-9 Discussion #: 4 Anderson: Chapter 3 (from last week), Anderson: Chapter 6 Subjects/Concepts: Perfect competition and the supply curve Markets with controls Readings: This week: Next week: KW Chapter 9, KW Chapter 4 KW Chapter 5, KW Chapter 6 Homework: Graded: Ungraded: Chapter 3, problem set II Chapter 9, problem set I; Chapter 4, problem set I Section Quizzes: None Exams: None Other Important Information: None
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(c) Sherrie A. Kossoudji Today’s Class Business When supply and demand both shift in the market Perfect competition and the supply curve Principle concepts: demand, supply, market equilibrium Principle tools: the demand curve, the supply curve WWWTP & practice problem
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(c) Sherrie A. Kossoudji Sherrie’s office hours cancelled this week. There will be extra office hours next week.
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(c) Sherrie A. Kossoudji Shifting demand by influencing preferences—Super Bowl Advertising If past years are any guide, 90 million people will watch CBS's broadcast of Sunday's game, between the Indianopolis Colts and the Chicago Bears, the biggest TV audience of the year. CBS is charging as much as $2.6 million for a 30-second spot. For Madison Avenue, the Super Bowl is a contest for who can produce the funniest, most creative and entertaining spots. Advertisers in this year's game include Anheuser-Busch Cos., PepsiCo Inc., Coca-Cola Co. and Sprint Nextel Corp.
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(c) Sherrie A. Kossoudji Market Analysis--Airline executives at Congressional Hearings (I am paraphrasing from a report). AE: “The public sector should pay for increased security at airports. If we increase the ticket price, there will be fewer travelers.” Congressperson: “ Are you trying to tell me that people’s travel decisions will be affected by a measly $3 tax on a ticket?” Supply Curve Demand Curve e P e Q new e P - new - e Q Supply Curve with tax $3 Quantity of Airline Tickets Price of Airline Tickets
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(c) Sherrie A. Kossoudji What happens if both curves shift? S shifts out, D shifts out S shifts out, D shifts in S shifts in, D shifts out S shifts in, D shifts in e P e P e P e P e Q e Q e Q e Q ? ? ? ?
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(c) Sherrie A. Kossoudji Market Analysis—what is the impact of avian flu on the market for chicken in Hong Kong? Be careful how curves are drawn!!!!
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econ101w0708 - Introductory Economics Economics 101-300...

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