Standard M12 Supply and Demand Blog 5

Microeconomics

1.  Using  the typical 'Facebook' lingo, write a definition for Microeconomics and then provide a standard English translation for your 'Facebook' definition. Is a branch that studies how the individual parts of the economy, the household and the firms make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold. Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and services.

Role of Money -M11

1.  Using what you learned about the three functions of money, explain how 'play money' differs from 'real' money? By Using what we learned about the three functions of money, Real money is a medium of exchange, unit of account, and a store of value. Play money doesn't has any of these characteristics.




2.  Money has no actual value other than the value we attach to it. The barter system would still be practiced today if the participants did not agree to set a value on a piece of printed paper that represented the value of the goods and services they had to offer.  What would you accept in place of money, if someone wanted to 'buy' your most prized material possession? I would accept anything they offer me as long as it value.

Circular Flow Model - M11

1.  What does a circular flow model tell us? What the circular flow model tells us is that three basic elements of the economy will work and interact together to ensure that our needs and wants are provided for.
 

2.  What is the role of households in the three sector circular flow model? Households provide businesses with payments in exchange for jobs and goods and services. They also pay taxes to the government and hold the four factors of production.





3.  What is the role of businesses in the three sector circular flow model? Businesses provide income, goods, and services to households. They also pay taxes, supply goods and services to the government.

4.  What is the role of government in the three sector circular flow model? The government supplies services to houses and income. They also give services and payments to businesses.



5.  What role do households have in the factors or resource market (inputs)? They household factors are the four factors of production.

Title:  Law of Demand and Law of Supply - M12

1. For each event described below, explain what happens to either the demand or supply curve. (increase/decrease, Shifts left or right?)

(a) What happens to the demand for chicken if concerns about mad cow disease lead to widespread euthanizing of  cows on U.S. cattle farms? The demand for chicken rises because it is a good substitute for beef and cows are becoming less and less.




(b) What happens to the supply of orange juice if Florida is hit with very severe weather? The supply of oranges will decrease and there will be no orange to make no orange because of the severe weather.



(c) In the market for coffee, severe global weather systems destroy 30% of the coffee bean crop. If the severe global weather destroy 30% of the coffee bean crop then the supply of the coffee will decrease to a low rate and there will be less coffee to sell.



(d) In the market for cereal, if the price of cardboard material used to package cereal increases. The supply will decrease unless the consumers are willing to pay more money . 




2. For each part below,  EXPLAIN what happens to equilibrium quantity and price (increase or decrease?).

a)  In the market for doughnuts, if they were found to be a major contributor to high cholesterol in adults. equilibrium quantity Demand and supply will drop resulting in a new equilibrium quantity. 



b)  In the market for doughnuts, if widespread unemployment continues. A shift in supply to the left because there will be less doughnuts that will be produced and the price will drop on them.



c) In the market for doughnuts, if Krispy Kreme introduces a new whole wheat 'low-calorie' doughnut. The demand curve and supply curve will shift to the right resulting in a higher equilibrium quantity price. 



3.  What are two factors that can change the quantity demanded?  Provide an example for each. 1. A change in consumers in come: an increase (decrease) in income shifts the demand curve to the right (left). 2. Population change: an increase (decrease) in population shifts the demand curve to the right (left).



4.  What are two factors that can change the quantity supplied.  Provide an example for each. A change in the inputs: an increase (decrease) in the input. The number's of buyers goes up or down and more suppliers enter the market.






Reflection:  What are two questions that you have about standards M11 and M12.
1) How supply shocks affect supply and demand curves.
2)

Blog #4

1. How are the economic goals of freedom, security, efficiency, equity, stability, and economic growth achieved in a market economy? Freedom is the freedom of the marketplace; security is enhanced by individual efforts, such as saving and the purchase of insurance, as well as by the growth of the economy; efficiency possesses productive efficiency in producing goods; equity can be described as the application of our concepts of what is fair and what is unfair; stability is absence of inflation or deflation, not the absence of changes in relative prices in particular markets; economic growth producing increasing amounts of goods and services over the long term.



2. Why has the role of government in the economy increased dramatically since the 1880s? During the 19th century, governments played a central and pervasive role both in establishing the economic and institutional conditions necessary for the occurrence of the Industrial Revolution and for promoting its spread to the follower European nations. Everywhere, governments reduced the risks of private transactions by promulgating laws that limited entrepreneurial liability, increasing the security of property rights, and enforcing private contracts.

3. Write an argument that supports or opposes the statement in the visual below that says, "deregulation won't work because people are greedy”?  I believe that the deregulation wont work, because the whole purpose of starting a business is to make money. Its very little people who can say they have enough money, because you can never have enough money. And without the regulation prices will be through the roof and the workers will be mistreated an it wouldnt benefit the consumers or owner.

4. Explain why the government provides public goods and services. Why are these public goods and services NOT provided by the private sector? (Please include a discussion on non-rivalries and non-excludable goods) The government provides public good and services because they have to be non-rivalrous and non- excludable so that everyone can have access to these goods. If private sectors provided these goods, they would not be non-rivalrous and non-excludable.

5. What are the 6 functions of government in a market economy (provide an example of how the government fulfills each of these 6 functions)? The six functions of government in a market economy are freedom, security, efficiency, stability, equity, and economic growth. Freedom is achieved by the people having the freedom to work (or not), freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft. Security is achieved by having stable income or other resources to support a standard of living now and in the foreseen future. Efficiency is achieved by production proceeding at the lowest possible per-unit cost. Stability is achieved by the absence of excessive fluctuations in the economy, an example is high employment. Economic growth is achieved when a nation’s wealth increases over time.

6. Describe the relationship that inputs and outputs have on productivity? The input is adding more capital to a business to increase the workers productivity, which will improve the business output. In additional to that also increase the company's profit.

7. How do investments in capital goods, technology, human capital, training, and educating workers, improve productivity and economic growth? You invest into capital goods, technology, human capital, training, and educating workers that improves productivity because smarter workers find ways to complete more work in less time. Human capital and technology increases productivity because they aid the workers so that more work can be completed.

8. Refer to the chart below and explain the cause of the decrease in the output, productivity, and employment in manufacturing in the United States. What can the United States do to reverse this downward trend in manufacturing? Deregulations has more ups than downs. In this chart, the effect of not having the government involved is exemplified.

Reflection: What are two questions that you still have about these particular standards? What way would market economy be useful? How do inputs and outputs show scarcity?