Saturday, 19 November 2011
EWOT Goggles #11 "Eating More....spending more?" (11/19/11)
I've been going to the gym a lot lately to lift. As a result, I've been eating a lot more food and taking in a lot more calories. What does this do to my wallet? Well, obviously I'm spending more but since I'm using declining, does that have an effect. YES! Since all my declining has already been paid for, buying more food doesn't change the amount of money I'm spending. Therefore, it's a sunk cost and only my marginal cost increases due to the fact that my declining balance goes down. So, unless I go over the declining limit, I'm not spending any more money (more or less) on food.
Reading Analysis #11 "Propaganda Posters" (11/19/2011)
A)
This week's reading assignment consisted of 4 propaganda images that sent messages to the American public about WW2, slaves, and the economy. When looking at the images in the context of supply and demand, we can say that:
1.) For the first image, the demand for (war) resources is obviously very high and so the image associates wasting resources to essentially aiding the opposition. Based on the message the image is sending, the supply is relatively low, so the prices for these resources are likely low as well.
2.) Virtually the same message is seen in the second piece of propaganda. The picture suggests that by driving your car alone, you are riding with Hitler, or, you're "teaming up" with Hitler. The message here is to conserve gasoline and materials to make cars by sharing cars, so it's assumed that the demand for these resources is again very high and the supply is low.
3.) The third image consists of a slave family that is being whipped or at least abused by their slave master. The family is shown in the light while the slave master is shown in the dark, specifically inside a cast shadow that shows a picture of someone holding a whip. The slave family is in a position of helplessness and the slave master in a position of power. The propaganda wants a change in society where no slaves exist and everyone is free. The demand for freedom is high but the supply is low and since a change is favorable it is a shift towards a higher supply and lower demand of freedom.
4.) The fourth image shows a picture of a woman who makes a pledge to only pay for goods that are reasonably priced and to stop settling for rationed goods. The demand curve has experienced a shift to the right as the prices are higher than they were before for the same quantity demanded. The hope for the U.S. Dept. of Economic Stabilization is to get back to the point where the quantity demanded is at a lower price (shift back to the left). The same goes for the supply curve except the shift occurs in the opposite direction.
B.)
C.)
This assignment was assigned because it is an application of the theories of supply and demand in the U.S. economy, particularly during times of hardship. The images demonstrate the dramatic effects that these events had on supply and demand.
This week's reading assignment consisted of 4 propaganda images that sent messages to the American public about WW2, slaves, and the economy. When looking at the images in the context of supply and demand, we can say that:
1.) For the first image, the demand for (war) resources is obviously very high and so the image associates wasting resources to essentially aiding the opposition. Based on the message the image is sending, the supply is relatively low, so the prices for these resources are likely low as well.
2.) Virtually the same message is seen in the second piece of propaganda. The picture suggests that by driving your car alone, you are riding with Hitler, or, you're "teaming up" with Hitler. The message here is to conserve gasoline and materials to make cars by sharing cars, so it's assumed that the demand for these resources is again very high and the supply is low.
3.) The third image consists of a slave family that is being whipped or at least abused by their slave master. The family is shown in the light while the slave master is shown in the dark, specifically inside a cast shadow that shows a picture of someone holding a whip. The slave family is in a position of helplessness and the slave master in a position of power. The propaganda wants a change in society where no slaves exist and everyone is free. The demand for freedom is high but the supply is low and since a change is favorable it is a shift towards a higher supply and lower demand of freedom.
4.) The fourth image shows a picture of a woman who makes a pledge to only pay for goods that are reasonably priced and to stop settling for rationed goods. The demand curve has experienced a shift to the right as the prices are higher than they were before for the same quantity demanded. The hope for the U.S. Dept. of Economic Stabilization is to get back to the point where the quantity demanded is at a lower price (shift back to the left). The same goes for the supply curve except the shift occurs in the opposite direction.
B.)
- What determines whether a propaganda poster is effective or not other than the response it administers?
- What events do you think would produce the biggest shift in the supply/demand curve?
- What was the process of coming up with a propaganda image like?
C.)
This assignment was assigned because it is an application of the theories of supply and demand in the U.S. economy, particularly during times of hardship. The images demonstrate the dramatic effects that these events had on supply and demand.
Sunday, 13 November 2011
Class #30 "Demand Curve and Elasticity" (11/11/2011)
Elasticity and Total Revenues
Total Revenues = P * Q
- when price goes up, Q goes down
- when price goes down, Q goes up
- Example: P goes from $50 - $80 and Q goes from 10 - 4..... is it elastic?
* TRA = $50 x 10 = $500
* TRB = $80 x 4 = $320 ...... decrease in total revenue = price change and TR change in opposite directions = ELASTIC
Income Elasticity of Demand
- (% change in Q)/(% change in income) ......
* > 0 = normal good
* < 0 = inferior good
We also began very preliminary discussions on the law of supply....
Total Revenues = P * Q
- when price goes up, Q goes down
- when price goes down, Q goes up
- Example: P goes from $50 - $80 and Q goes from 10 - 4..... is it elastic?
* TRA = $50 x 10 = $500
* TRB = $80 x 4 = $320 ...... decrease in total revenue = price change and TR change in opposite directions = ELASTIC
Income Elasticity of Demand
- (% change in Q)/(% change in income) ......
* > 0 = normal good
* < 0 = inferior good
We also began very preliminary discussions on the law of supply....
-Rizzo
Daniel Gaona
Class #29 "Elasticity and Demand" (11/09/2011)
Demand, and quantity demanded can clearly change through change in prices, substitutes, income, ect. HOW MUCH QD changes is what elasticity is.
Elasticity = (%Change in QD) / (%Change in area of interest, ex. price)
Essentially elasticity is how sensitive consumer(s) are to change in prices, or other factors. A high elasticity ( i.e. over 1) means you will react more drastically to changes in prices.
What impacts elasticity?
1. Time: Long term elasticity will not be the same as short term elasticity.
(EX. gas goes to $10, at first you will have to keep driving, but eventually start carpooling, and maybe buy a electric car, move closer to work, ect.)
2. Budgets: If you have more extra income, you will tend to be less sensitive to price changes.
3. Substitutes: The amount of available substitutes will affect elasticity.
Rizzo
-Daniel Gaona
Class #28 "Market Demand/ Elasticity" (11/07/2011)
From Individual to Market Demand
Comparative Statics: What things impact how much we buy.
(1) When the price changes, you move up and down the demand curve.
(2) Changes in demand, not quantity demanded - things that might change, other than the price, which impact consumption choices: (1) Changes in income - when you get more income, it doesn't mean you'll consume more of everything, (2) prices of other things may change, (3) expectations change - expectations about the price of burritos will impact our decision to consume burritos, (4) tastes might change - your preferences might change, and (5) the # of participants - adding consumers will change.
Normal Goods - when income increases, quantity demanded increases.
Inferior Goods - when income increases, quantity demanded decreases.
Substitute Goods - As the price of good X increases, the demand of good Y increases.
Compliment Goods - As the price of good X increases, the price of good Y increases.
Quantity Demanded: how much of a good we consume as a function of our ability and willingness to pay.
Elasticity
Law of demand tells us as tradeoffs get worse, we do less, but when tradeoffs get better, we do more.
For goods, when your consumption is very response to a change in its price we say the good is elastic. When prices change widely but your consumption does not change, a good is said to be inelastic.
We can measure elasticity using Own Price Elasticity of Demand:
m = %change in quantity demanded / %change in price. If m = 2. Then if the price of the good incases 10%, you consume 20% less of that good.
Comparative Statics: What things impact how much we buy.
(1) When the price changes, you move up and down the demand curve.
(2) Changes in demand, not quantity demanded - things that might change, other than the price, which impact consumption choices: (1) Changes in income - when you get more income, it doesn't mean you'll consume more of everything, (2) prices of other things may change, (3) expectations change - expectations about the price of burritos will impact our decision to consume burritos, (4) tastes might change - your preferences might change, and (5) the # of participants - adding consumers will change.
Normal Goods - when income increases, quantity demanded increases.
Inferior Goods - when income increases, quantity demanded decreases.
Substitute Goods - As the price of good X increases, the demand of good Y increases.
Compliment Goods - As the price of good X increases, the price of good Y increases.
Quantity Demanded: how much of a good we consume as a function of our ability and willingness to pay.
Elasticity
Law of demand tells us as tradeoffs get worse, we do less, but when tradeoffs get better, we do more.
For goods, when your consumption is very response to a change in its price we say the good is elastic. When prices change widely but your consumption does not change, a good is said to be inelastic.
We can measure elasticity using Own Price Elasticity of Demand:
m = %change in quantity demanded / %change in price. If m = 2. Then if the price of the good incases 10%, you consume 20% less of that good.
-Rizzo
Daniel Gaona
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