08 Jun Question Hi this is an economic homework
Question
Hi this is an economic homework
you need to answer 6 questions.
1) What is the definition of ” opportunity cost” ?
Give an example
2) Compare the difference between “Change in Demand
“and ” Change in Quantity demanded”
3) At what price does Shortage and Surplus occur ? Once a market
has shortage and Surplus, then what happens to the market price?
4) With a given demand, if there is a decrease in Supply, what
happens to an equilibrium price and output sales?
And 5,6 questions must watch the video and write the answer, but
I attached transcripts of videos instead of videos. Make sure to read every
transcripts and answer.
number 5 question has 6 transcripts, and number 6 question has 5
transcripts
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in this working with diagram’s feature we’re going to look at and exhibit in chapter three titled Shifts and the Demand Curve. So, let’s start with the demand curve. We’ve got our axis here. We’ve got quantity demanded on the horizontal axis and price of the good on the vertical axis and we’re going to look a given demand curve, D1. And we’re going to pick a point on this demand curve point A and we’re going to say that that point goes along with a price of 20 dollars and it goes along with a quantity demanded let’s say a 500 dollars. And then, we’re going to take a point, point B, I’m going to say that goes along with the price of 10 dollars and a quantity demanded we’re going to say of 700. All right. Now, we want to increase demand, what does it mean if we increase the demand for a good? Well, that means that individuals are willing and able to buy more units of this good at each [inaudible] price. So, instead of let’s say buying 500 or quantity demanded 500 at 20 dollars, at 20 dollars, let’s say they want to buy 600. I want to put a point here C and it goes along with a quantity demanded of 600. And let’s suppose that at 10 dollars, instead of buying a quantity demanded or having a quantity demanded of 700, they want a quantity demanded or they want to buy 800, right? So now, if we connect point C and D, we get a new demand curve, all right? So an increase in demand, an increase in demand is diagrammatically illustrated by rightward shift in the demand curve, the demand curve shifts right. Again, an increase in demand is represented diagrammatically as rightward shift in the demand curve. Well, what about a decrease in demand? Let’s start with a demand curve once again. So, here is quantity demanded and price of a good and again, we’re going to draw a demand curve D1 and we’re going to pick a point, point A and we’re going to say that goes with 20 dollars and with a quantity demanded let’s say of 500. Now, we’re going to pick another price, 10 dollars and again, that’s going to go with a certain quantity demanded let’s say of 700. Now, we have a decrease in demand or what does a decrease in demand mean? It means that individuals are willing and able to buy less of the good at each and every price. So at 20 dollars, instead of wanting to buy 500 units, let’s say they want to buy 400 units. So, I’m going to put a point here, I’m going to call it point C, label this point down here, point B. I’m going to call it point C and we’re going to have that going along with 400. And then at 10 dollars, instead of individuals wanting to buy 700, we’re going to have them want to buy 600. So we’re going to put a point right here, point D and we’re going to have that point D correspond the 600, right? Now, if we connect this point C and D, we get a new demand curve D2 and this shows a decrease in demand. So, a decrease in demand is represented by leftward shift in that demand curve. Let’s recap. Demand goes up, that means the demand curve shifts to the right. Demand goes down for a good that means the demand curve shifts to the left
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