econ 2030 2-07

econ 2030 2-07 - skyrocketing during natrual disasters 2....

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TODAY’S MENU: Monday 07 February 2011 I. BUSINESS A . Practice Problems 1. Chapter 5: 1-5, 9, 11, 14 2. Chapter 7: 1-4, 7, 8, 11-17, 20, 24, 25 B. First Exam: One week from today II. SUBSTANCE A. The Method reviewed 1. Who is directly affected? 2. How does behavior change? 3. What is the result?
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B. Price controls 1. Price ceiling- maximum allowable price for a good or service a. Binding (i.e., effective) b. Non-binding (i.e., ineffective) c. Examples says that the price of a good cannot go over a certain amount 2. Price floor- minimum allowable price charged for a good or service a. Binding (i.e., effective) b. Non-binding (i.e., ineffective) c. Examples C. Quantity restrictions- maximum amount that is allowed to be sold 1. Binding (i.e., effective) Comment [JAL1]: There are times where prices do not always respond could be government or social pressures that keep prices from adjusting to equilibrium AKA price ceiling Price floor And quantity restrictions Comment [JAL2]: Gas prices prevented form
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Unformatted text preview: skyrocketing during natrual disasters 2. Non-binding (i.e., ineffective) 3. Examples Quotas that restrict quantity to perserve for the future D. Elasticity 1. Motivation 2. Price elasticity of demand a. Definition b. Measure i. Elastic-means sensitivity ii. Inelastic- insensitive iii. Unit elastic c. Determinants i. Number and availability of substitutes ii. Necessity or luxury iii. Proportion of budget spent on good iv. Time III. NEXT TIME Comment [JAL3]: The restriciton on fishing inorder to not kill all fish Comment [JAL4]: House of blues can only sell so many tickets when there is a shortage ppl scalp tickets inorder to get more money Comment [JAL5]: Price elasticity of dmand Comment [JAL6]: Measures how buyers respond to change in price Comment [JAL7]: Less responsive (basically will ocntinue to do the same thing Comment [JAL8]: Crucial info for sellers A. Finish Chapter 7: “Describing Supply and Demand: Elasticities”...
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This note was uploaded on 09/18/2011 for the course ECON 2030 taught by Professor Bong during the Spring '07 term at LSU.

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econ 2030 2-07 - skyrocketing during natrual disasters 2....

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