ECON 1100 1nd Edition Lecture 8 Outline of Last Lecture I. 3 QsII. EquilibriumIII. Consumer SurplusIV. Producer SurplusOutline of Current Lecture I.VideoII.Applying supply & demand curves to real worlda.Timber industryb.Sierra clubCurrent LectureI. VideoDescribed how timber prices shot up in 1992-1993, nearly doubling in a yearTwo sidesTimber industrySierra clubFactsIncrease supply, supply curve shifts right, marginal cost increasesDecrease supply, supply curve shifts left, marginal cost decreasesIncrease demand, demand curve shifts right, marginal max willingness to pay increasesDecrease demand, demand curve shifts left, marginal max willingness to pay decreases II. Applying supply & demand curves to real world – Timber IndustryIncrease price = reduction in supplyThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Timber industry reduced supplyLink between the inputs & outputs could be affected by technology. Possible response to media: environmentalists are trying to protect an owl which decreases our supply due to no good timber that we could use. The old timber where it lives was big and cheap for us to use.What happened graphically: II. Applying supply & demand curves to real world – Sierra ClubSay that timber sent abroad (1/3)Coming out of the recession during this time Booming house market = need timberInterest rates falling (complement)Possible response to media: capitalists want to ‘rape’ the earth and make money off of it.What happened graphically:Who’s right?Both could be then the quantity demanded is about the sameIf Sierra club: more productionIf Timber industry: less productionLooking at it
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