Mood.

I should have done my blog sooner. 

Unit One: Last post! Buiness cycles!

(1/20/15)

Expansionary: Real output in the economy is increasing and the unemplyment rate is declining. (growth) EX: construction.

Peak: Real output is at its highest point.

Contractionary (Recession): real output in economy is decreasing and the unemployment rate is rising.

Trough: This is where you reach tour lowest point of GDP.

*One cycle is from T to T. (T = trough)
*Recession lasts about 14 months.
*The bulk of the cycle is the growth stage

Unit One: this is seriously never ending...

(1/14/15)

Price elasticity of demand: tells how drastically buyers will cut back/increase their demand for a good when their price rises/falls.

- 3 types of price elasticity of demands...
1)  Elastic demand --> when a demand changes greatly due to a change in price. (wants)
     EX: Substitutes like steak to chicken.

E is greater than One. [E > 1]

2) Inelastic demand --> demand will not change for a product even if the price changes. (needs)
     EX: milk, gas, and salt.

E is less than one. [E < 1]

3) Unit Elastic -->

E is equal to one. [E = 1]

Equations... 

Step 1.  %△ in quantity:

New Quantity - Old Quantity 

Old Quantity

Step 2. %△ in price:

New Price - Old Price 

Old Price

Step 3. Price Elasticity of Demand (PED):

%△ in Quantity

%△ in Price

*Price multiplied by Quantity gives you revenue.

Unit one... continued

(1/15/15)

Terms...

Surplus: QS > QD 
(Quantity Supplied is greater than Quantity Demanded)

Shortage: QD > QS
(Quantity Demanded is greater than Quantity Supplied)

Marginal revenue: additional income from selling one more unit of good. 

Equilibrium: Point in which supply and demand intersect, at this point resources are used efficiently. 

Disequilibrium: When not used efficiently, not intersecting. 

Price ceiling: government imposed price controlled on how high a price can be charged for a product or service. (EX: Rent control) 

Price floor: government imposed price control on how low someone can charge for a product/service. (EX: Minimum wage) 

Market equilibrium graphs: 

teehee

Brief intro of supply, demand, and more!

Yaaaaaaaaaaaaaaaaaas Video!

Unit one demand and supply.

Demand and Supply 
(DEMAND 1/12/15)

Demand: is the quantities that people are willing and able to buy at various prices.

-The image to the left is a simple demand curve, always downwards sloping.

The law of demand: There us an inverse relationship between price and quantity demanded.
-The image below explains the law very well.

What causes a change in "quantity demanded"?  The answer is the △ in price. (△=change)

There are five determinants. 
1. △ in buyers taste. (advertising)
2. △ in number of buyers. (population)
3. △ in income.
     a) Normal goods - goods that buyers buy more of when their income rises.
     b) Inferior goods - goods that buyers buy less when their income rises.
4. △ in price of related goods.
     a) Substitute goods - goods that serve roughly the same purpose to buyers.
     b) Complementary goods - goods that are often consumed together.
5. △ in expectations. (the future)

(SUPPLY 1/15/15)

Supply: is the quantities that producers/sellers are willing and able to produce/sale at various prices.

-The image to the left is a simple supply curve, it is upwards sloping. 


The law of supply: There is a direct relationship between price and quantity supply. 
-The image below explains the law fairly well.

What causes a change in "quantity supply"? The answer is the △ in price. (△=change)

There are six determinants for the change in quantity supplied: 
1. △ in weather.
2. △ in technology.
3. △ in cost of production.
4. △ in taxes or subsidies.
5. △ in number of sellers.
6. △ in expectations.