3E Economics par. 2.3

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Par. 2.2 assignment 6a
Which statement is incorrect?

1. TR = 400 x 2
2. Sales = 400
3. TC = 140,22Q
4. TP = 1,78Q - 140

Hw.

Par. 2.2 Assignment 6a

 

Turnover = 400 x 2 = 800

Total variable costs = 0,22 x 400 = 88

Total costs = 88 + 140 = 228

Profit = 800 - 228 = 572

Par. 2.2 assignment 6b
Which statement is incorrect?

1. ( 0,22 x 400 + 140 ) / 400
2. 0,22 + 140 / 400
3. ( 0,22 + 140 ) / 400

Par. 2.2 assignment 6c
The costs per product ...(1) when we produce more products, because the ...(2) costs can be divided over more products

1. 1 decrease 2 fixed
2. 1 decrease 2 variable
3. 1 increase 2 fixed
4. 1 increase 2 variable

Par. 2.2 Assignment 6e

1. TC = 0,22 + 140
2. TC = 0,22Q + 140
3. TC = 0,22 + 140Q
4. TC = 0,22Q + 140Q

Demand curve

Supply curve

Market equilibrium

Market

Demand curve and supply curve lead to a market equilibrium

Qs = Qd

1 > Solve the equation

2 > intersection point of the 2 lines 

Market equilibrium

The intersection point where supply and demand are equal for a certain product (Qs = Qd)

Calculation

For the market of a certain product we have the following equations

Qd = - 2,4p + 1200 en Qs = 4p - 400

Qs = Qd

4p - 400 = - 2,4p + 1200

6,4p = 1600

P = 250

Equilibrium price = €250

Calculation

Now we now the equilibrium price ( €250) we can calculate the equilibrium quantity

Qd = - 2,4p + 1200 and Qs = 4p - 400

-2,4 x 250 + 1200 = 600

Equilibrium quantity = 600

Check: 4 x 250 - 400 = 600

Example

qd = -100p + 600

qs = 50p – 150

Equilibrium price?

Equilibrium quantity?

qs = qd 

50p – 150 = -100p + 600 ----> 150p = 750 ---->  p = 5

qs = 50 x 5 – 150 = 100  and   qd = - 100 x 5 + 600 = 100

Qd = -10p + 80
Qs = 5p - 10
Equilibrium price?

1. 4,67
2. 6
3. 14
4. 18

Qd = -10p + 80
Qs = 5p - 10
Market turnover?

1. 20
2. 120
3. 140
4. 840

How can the equilibrium price change?

- shift of the supply curve

- shift of the demand curve

The invisible hand

The market mechanism will 'automatically' insure the market price to become the equilibrium price

Famous economist Adam Smith called this the invisible hand

At a demand excess the invisible hand will push the market price up until we reach a new equilibrium price

At a supply excess the invisible hand will push the market price down until we reach a new equilibrium price

How does a market respond to a shift of the demand curve to the left? Put the events in the right order. 

Step 1

Step 2

Step 3

Step 4

A part of the supplied product is not sold.

The demanded quantity will increase, the supplied quantity will decrease.

The market will 'automatically' come to an equilibrium.

Suppliers that don't sell all their products will lower the price.

Hw.

For next lesson:

Par. 2.3 assignments 6, 13 and 14

Tasks:

Week 2: Par. 2.1 assignments 2, 3, 4, 5, 6, 7, 8, 9

Week 3: Par. 2.2 assignments 2, 3, 4, 5, 7, 8, 9, 10

Week 5: Par. 2.3 assignments 1, 3, 4, 7, 8, 9, 10, 11

and par. 2.6 assignments 7, 8