3E Economics par. 2.2

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Par. 2.1 assignment 1

a)  -100 x 20 + 24.000 = 22.000

b)  -100 x 80 + 24.000 = 16.000

c)  -100P + 24.000 = 17.000

-100P = -7.000

P = 70

d) Sold out very quickly, demand > supply

Par. 2.1 assignment 10a

1. Change, it will be another point on the same curve
2. Shift, we will buy less scooters at any price

Par. 2.1 assignment 10b

1. To the left, they are complementary goods
2. To the right, they are competitive goods

Par 2.1 assignment 10c

1. To the left, they are complementary goods
2. To the right, they are competitive goods

At a higher price companies will supply ...(1) products, because they achieve a ...(2) profit

1. 1 less 2 lower
2. 1 less 2 higher
3. 1 more 2 lower
4. 1 more 2 higher

Supply curve

Demand curve

Supply curve

Supply curve

Supply curve: shows the relationship between price and the quantity supplied

Example of a supply curve: 

Qs = 0,25P – 5

Qs = amount of products offered

P = price of the product in euro’s

• the supply curve will be upward sloping
• the number before p will be positive

How to draw the supply curve?

1. Calculate the price when Qs = 0 
2. Calculate Qs at a higher price than the answer of step 1. 
3. Draw the vertical axis with the price and the horizontal axis with Qs.
   
4. Put 2 dots on the points you calculated at step 1 and 2 and draw the line. 

How to draw the supply curve?

Calculate the price when  Qs = 0  

0,25P - 5 = 0

0,25P = 5

P = 20  
 so ( 0, 20 )

Calculate the Qa at a higher price than the answer in step 1 

0,25 x 80 - 5 = 15

so ( 15, 80 )

Supply curve

The supply curve gives us the amount of products supplied at a certain price.

Qs = 0,25P – 5

(p in €, Qs in number of products)

Turnover

Turnover or Total Revenue = sales quantity x selling price
 TR = P x Q

2000 ties are sold for € 50
Sales = 2000 products
Total Revenue = € 50 x 2.000 = € 100.000

Total Profit

Total Revenue = Sales x Selling price
 TR = P x Q

Total profit = Total Revenue - Total Costs

TP = TR - TC

Total Costs (restaurant)

Fixed costs - costs that are not dependant of the number of products produced.

F.e.: rent, insurance

Variable costs - Costs that do depend on the number of produced products. 

F.e.: ingredients of the meals 

Total costs

TC = 2Q + 100

2Q = variable costs, depend on Q (amount of products)
F.e.: costs per pizza are € 2

100 = fixed costs, you have to pay them anyway
F.e.: Loan and rent

A bakery sells 200 loafs of bread and receives € 420 in total. What is correct?

1. Sales is € 420
2. Total profit is € 420
3. Total revenue is 200
4. Total revenue is € 420

A company sells 30 shirts at € 30 per shirt. The total costs are € 420. What is incorrect?

1. Total profit is € 480
2. Sales are 30 shirts
3. Total Revenue is € 900
4. Total profit is € 900

Hw.

For next lesson:

Par 2.2 assignment 6

For now:

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

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