1 For question 1 answer a The term Economics itself has its origin from what language combining 2 words Oikos and Nemos Greek from b as mentioned in your notes often an economy size product or package might be a larger product larger detergent bottle or cereal box but sometimes it is smaller a smaller or compact car vs a full size car vehicle Think of an example from your own experience of some other i larger economy size product family size Doritos 17 oz ii smaller economy size product the regular size bag of Doritos 9 75 oz 2 How important is the idea concept of scarcity to the subject of economics explain in a sentence or two Scarcity forces people to chose how they will use their resources in an attempt to satisfy their unlimited wants and desires Economics is about making choices and without scarcity there would be no economic problem Without Scarcity there is no need to economize and therefore no economics Walter Williams Answer questions related to Supply Demand based on text or notes 1 a According to your text if anything exemplifies microeconomics it is what model a demand model b How are movements along a demand curve different from a shift in the demand curve A shift in demand either increase or decrease A movement along a demand 2 a According to the law of demand if the price of a good or service increases one would expect the quantity demand to increase or decrease b According to the law of demand if the price of a good or service decreases one would expect the quantity demand to increase or decrease curve Decrease Increase 3 Answer the following related to notes and or text information a Suppose that name brand Cheerios are considered a normal good and an individuals income increases What could be expected to happen to the demand for Cheerios decreases b Suppose that Store Brand version of Cheerios cereal is considered an inferior good and an individuals income increases What could be expected to the demand for store brand version of Cheerios decrease c Given the rule for Compliments and demand suppose that milk cereal are complimentary goods Then suppose that the price of milk decreases What might one expect to happen to the demand for cereal increases d Given the rule for Substitutes and demand suppose that Coca Cola Sam s Choice Cola are substitute goods Then suppose that the price of Coca Cola increases What would one expect to happen to the demand for Sam s Choice Cola increase e Consider the rule for expectations a situation such as an expected predicted snowstorm in areas of Alabama People s expectations that the snow COULD lead to power outages or the inability to drive on roads for 24 72 hrs bread in advance of the predicted snow might increase or decrease demand for milk or increase f Suppose the number of buyers of Product X decrease Based on the rules for changes in demand one would expect demand to increase or decrease decrease g Suppose that a product becomes more fashionable or trendy Based on t changes in demand one would expect demand to increase or decrease he rules for increase 4 Does the following definition best fit for supply or demand a schedule or curve showing the various amounts of a product that producers are willing able to provide for sale at various prices at a given time supply 5 Answer the following for supply a According to the law of supply if the price of a good or service increases one would expect the quantity supplied to increase or decrease increase b According to the law of supply if the price of a good or service decreases one would expect the quantity supplied to increase or decrease decrease 6 Answer the following related to shifts in the supply curve a Given the rule for input prices and supply curve shifts imagine the following Suppose that the price of mozzarella cheese used to make Brand X frozen pizza increases One would expect the supply of Brand X frozen pizza to Increase or decrease increases b Based on the rule for supply curve shifts and expectations what would be expected to happen to the supply of roses i in the days and weeks immediately before Valentine s day increases ii in the days and weeks immediately after Valentine s day decrease c Suppose that a politician recommends an additional tax be placed on the production sale of SUV s Based on the rules for supply curve shifts one would expect the supply of SUV s to increase or decrease decrease d a subsidy is a payment provided by the government to produce a good or service Suppose that the US government provides a subsidy to farmers of corn in the US which it actually does One would expect that this would lead to what change in the supply of corn increase or decrease increase e Suppose that a severe drought impacts major tomato growing regions of California One would expect the supply of tomatoes to increase or decrease decrease f Suppose that there is an increase in the number of companies making face masks One would expect the supply of face masks to increase or decrease increase 7 Answer the following from the text or notes a The point where Quantity Supply Qs is equal to Quantity Demand Qd is also known as what price equilibrium b If the supply curve increases shifts to the right what would happen to the Price equilibrium Peq Increase or decrease decrease c If the supply curve decreases shifts to the left what would happen to the Price equilibrium Peq Increase or decrease increase d If the supply curve increases shifts to the right what would happen to the Quantity equilibrium Qeq Increase or decrease increase e If the demand curve increases shifts to the right what would happen to the Price equilibrium Peq Increase or decrease decrease f If the demand curve increases shifts to the right what would happen to the Quantity equilibrium Qeq Increase or decrease increase g If the demand curve decreases shifts to the right what would happen to the Price equilibrium Peq Increase or decrease decrease h If the demand curve decreases shifts to the right what would happen to the Quantity equilibrium Qeq Increase or decrease decrease 8 Answer the following from text or notes a Under which condition do we find that Qs is greater than Qd surpluses or shortages surplus b Under which condition do we find that Qs is greater than Qd surpluses or shortages surplus c In the case of a shortage would one expect to find upward or downward pressure on prices upward d In the case of a surplus would one expect to find upward or downward pressure on prices downward 9 Answer the