my wife is haveing trouble with this class. she's taking it online and the teacher is not helping at all. she's the type that loves english and hates math so it makes it a little harder for her but she got an A in macro-economics and a B in statistics but she thinks she just bombed her midterm.


any help would be really appreciated.





leon

What does she need to know?

Perfect competition:
P=MR
MR=MC

is this principles or intermediate?





Intermediate is the hardest most econ majors take, and can be a real bitch if the teacher sucks.





Give us specific questions and I may be able to help. There are quite a few economists on this board.

 

Economics is rough without a good math background.

Thread hijack, any good not "dry" books that give a good basic well rounded info on economics, macro or micro it doesnt matter.

I loved micro and was an econ minor.



Its been a few years since I looked at any econ though.



Whats the question, and I might be able to help?  Is it a problem with the math or the concepts?

Economics topics on Arfcom are highly entertaining.  The latest was about businesses passing all their taxes on to customers.  To be fair though, it was more of a specific pricing topic than an economics topic.

on my way out the door from work, when i get home (and she gets home, even though we both leave the base about the same time) i will ask her to put some questions up.

im really not sure which part she is having trouble with. but she has told me that the teache rgives problems with out showing the work and that kind of stuff.


thanks guys. i knew there woudl be some people here who could help.


leon

Hi everyone, this is Marie. I want to thank you in advance. I’m trying to get through this class. But I’m having issues. I have tried to work this out with my teacher but he always seems to give half answers or something that is not broken down enough for me to understand. It’s gotten to the point that instead of discussion thread on topics weekly that us students are working through the homework problems that we aren’t given any answers to unless we ask for them.  In fact some students are getting more help from YouTube.
Anyways, enough of my misery.
Below I’ve complied the questions that I have been having issues with.   I understand that there is a lot here.  I appreciate the most help I can get to better understand what I’m doing wrong or not grasping. Sorry there aren’t many examples but the homework is easier than the quizzes.
The topics that are giving me the most difficulty are:
A. Demand and/or Supply Elasticity. I can’t understand when to use the Mid Point equation or the Elasticity of Demand equation.
B. The other which is kind of new to me.  Input and outputs of fixed/variable costs, (ATV/ATC and the such). Completely lost here. Don’t know where to start. I thought I understood the difference between variable and fixed costs. I was able to complete the chart for homework with no issues with just knowing Qty and fixed costs. But can’t figure out with just a few simple pieces of info.
C. How demand or supply is affected by qty or price increase or decrease. I get that the Demand curve is sloping downward and to the right for postive. Supply is sloping upward to the right for positive.
D. How to figure out if there is a surplus, overage, or equilibrium with just a chart not a graph. This equation is a little tough for me.
E. How demand and supply determinates affect each outcome. Such as how substitutes decision of the consumer would affect demand shift. Or

 2.Question :At the point where the demand and supply curves for a product intersect:

Student Answer:  the selling price and the buying price need not be equal.

   the market may, or may not, be in equilibrium.

  either a shortage or a surplus of the product might exist, depending on the degree of competition.

   the quantity that consumers want to purchase and the amount producers choose to sell are the same. (Great Job!)
Instructor Explanation:The point where the demand and supply curves intersect is the equilibrium point. At this point, the quantity that consumers want to purchase and the amount that producers choose to sell are the same.

6.Question :An increase in the price of a product will reduce the amount of it purchased because:

Student Answer:   supply curves are upward sloping.

  the higher price means that real incomes have risen.

   consumers will substitute other products for the one whose price has risen. (Good!)

  consumers substitute relatively high-priced for relatively low-priced products.

Instructor Explanation:The law of demand says that consumers will purchase less of a good as its price increases. This is because the opportunity cost of consuming that good has increased. Consumers want to consume the best possible combination of goods (to get the most out of their limited resources). When prices increase, consumers get less “bang for their buck”, and other goods and services become more attractive. This is why they will substitute other products for the one whose price has risen.

14.Question :If the price of product L increases, the demand curve for close-substitute product J will:

Student Answer:  shift downward toward the horizontal axis.

   shift to the left.

   shift to the right. (Good!)

  remain unchanged.

Instructor Explanation:If the price of product L increases, the quantity demanded of product L will decrease (the law of demand at work!) If product J is a close substitute, we know that the quantity demanded for L and J will travel in opposite directions. This means that the quantity demanded for product J will increase. This requires a rightward shift of product J’s demand curve.

1.Question :Which will cause a demand curve to be relatively elastic?

Student Answer:  There are few substitutes.

   The time interval considered is large. (Great!)

   The good is considered a necessity.

  Purchases of the good require a small portion of consumers' budgets.

Instructor Explanation:According to the text on page 81, the determinants of the elasticity of demand are given as the number of substitutes, the proportion of income that the good costs, whether the good is a luxury or necessity, and the time frame under consideration. Relatively elastic demand is characterized by a large number of substitutes, the purchase requires a large portion of the consumer’s budget, luxury goods and or a long period of time in which to make the purchase. In this case, the only option that fits this criteria is “The time interval considered is large”.

 4.Question :You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1. To increase total revenues, you should:

Student Answer:   increase the price of the software. (Correct!)

   decrease the price of the software.

  hold the price of the software constant.

  increase the supply of the software.

Instructor Explanation:In this problem, we are told that the price elasticity of demand is less than 1. This means that the demand is inelastic for the product. According to the text on page 79, “If demand is inelastic, a price decrease will reduce total revenue . . . If demand is inelastic, a price increase will increase total revenue.” The company should increase the price of the software.

9.Question :The supply curve for cars will be more elastic the:

Student Answer:  greater the quantity demanded.

   longer the time interval considered. (Good Work!)

   greater the decline in input prices.

  less able producers are to make other goods.

Instructor Explanation:Looking at page 81, quantity demanded is not a determinant of price elasticity of demand, nor are input prices or the number of producers. The only determinant touched on in these answers is the time period under consideration. The answer is the “longer the time interval considered”.

10.Question :At a price of $20 per unit, 140 units of good W are demanded and 100 units are supplied. When the price is raised to $30 per unit, 100 units are demanded and 140 units are supplied. The price elasticity of supply in this range is:

Student Answer:   1.0.

   .833. (Correct!)

  .417.

  1.20.

Instructor Explanation:Since we are looking at the elasticity of supply, we need to focus on the supply numbers. When price went from $20 to $30, the units supplied increased from 100 to 140. Using the midpoint formula, we find: percentage change in quantity supplied = (140-100)/(140+100)/2 = 40/120 = 0.333. The percentage change in price = (30-20) / (30+20)/2 = 10/25 = 0.4. The elasticity of supply is calculated by dividing the percentage change in quantity supplied by the percentage change in price = 0.333 /0.4 which gives us an elasticity of 0.833.

11.Question :A product priced at $5 has annual sales of 1,000 units. When price is reduced to $4, quantity increases to 1,250 units. Other things unchanged, the price elasticity of demand for the product is:

Student Answer:   unitary. (Correct!)

  elastic.

   inelastic.

  zero.

Instructor Explanation:If we apply the midpoint formula to this scenario, we find: (1000-1250)/(100+1250)/2 = -0.222 for the percentage change in quantity. To find the percentage change in price: (5-4) / (5+4)/2 = 0.222. If we divide the percentage change in quantity by the percentage change in price, we find: -0.222/0.222 which gives us -1. The demand for this product is unitary elastic.

15.Question :Along a linear downward-sloping demand curve, the price elasticity of demand will be:

Student Answer:  greater than one across each price range.

  less than one across each price range.

   equal to zero across each price range.

   different across each price range. (Good Work!)

Instructor Explanation:The elasticity of demand changes along a linear downward-sloping demand curve. At high prices, the elasticity is greater than it will be at lower prices along the curve.

1.Question :A product priced at $5 has annual sales of 1,000 units. When price is reduced to $4, quantity increases to 1,250 units. Other things unchanged, the price elasticity of demand for the product is: !

Student Answer:   unitary. (Correct!) This was a guess for me!

  elastic.

   inelastic.

  zero.

Instructor Explanation:If we apply the midpoint formula to this scenario, we find: (1000-1250)/(100+1250)/2 = -0.222 for the percentage change in quantity. To find the percentage change in price: (5-4) / (5+4)/2 = 0.222. If we divide the percentage change in quantity by the percentage change in price, we find: -0.222/0.222 which gives us -1. The demand for this product is unitary elastic.

10.Question :If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then:

Student Answer:  it is encountering diseconomies of scale.

   it is encountering economies of scale. (Nice Job!)

  the law of diminishing returns is taking hold.

   the firm's long-run ATC curve will be rising.

Instructor Explanation:Since the firm increased their inputs by 10 percent and they realized an increase of 15 percent in their output, it is safe to assume that their costs of production are falling. When output increases and costs fall, this indicates that economies of scale are present.

13.Question :Accounting profits are typically:

Student Answer:  greater than economic profits because the former do not take explicit costs into account.

  equal to economic profits because accounting costs include all opportunity costs.

   smaller than economic profits because the former do not take implicit costs into account.

   greater than economic profits because the former do not take implicit costs into account. (Great!)

Instructor Explanation:Since an economist includes both explicit and implicit costs when calculating economic profit, and an accountant only includes explicit costs, accounting profits are typically greater than economic profits.

31.Question :Kevin and Lilly make and sell rustic lamps.  Their primary inputs are cedar logs, electrical wire, and lamp shades.  They have three hourly employees that they bring on when the number of orders that they receive increases.  They advertise on billboards that require yearly contracts and work out of a rented office space under a yearly rental agreement.  They produce 50 lamps a month.  Their monthly costs are as follows:

Advertising = $500

Cedar Logs = $250

Electric Wire = $ 300

Hourly Wages = $550

Kevin and Lilly’s Salary = $1,200

Lamp Shades = $700

Rent = $1,500

 a. Divide the costs into fixed and variable.  Calculate the total cost, total fixed cost, and
     total variable cost. (10 points)

 b. Calculate the average total cost, average variable cost and average fixed cost. (10
     points)

 c. Name two things that can be done in the long-run that business are unable to do in
     the short-run? (10 point)

Student Answer: a. Salary, Hourly, Rent=Fixed Variable= supplies, Ads 3250/1750= 1.857. b.

Does only having 3 dollars in my wallet constitute "micro economics"?

If so, I'm an expert.

Amateur!

I lived off PENNIES for two years.......

I know all about micro economics

no one has any answers on how to understand these? i know she posted ALOT of questions. those are what she is having trouble grasping. if anyone has any ideas about how to explain any of um it would be a big help.

A. Demand and/or Supply Elasticity. I can’t understand when to use the Mid Point equation or the Elasticity of Demand equation.
Sorry, its been too long for me to remember the formulas and I had some difficulty with elasticity at the time anyway.

B. The other which is kind of new to me.  Input and outputs of
fixed/variable costs, (ATV/ATC and the such). Completely lost here.
Don’t know where to start. I thought I understood the difference between
variable and fixed costs. I was able to complete the chart for homework
with no issues with just knowing Qty and fixed costs. But can’t figure
out with just a few simple pieces of info. Variable costs are those associated with producing more. Variable costs include expenditures for wages, salaries, and raw materials. Fixed cost does not vary with the level of output and that can be eliminated only by going out of business. Rent, insurance, utilities, payments on equipment are what comes to mind for fixed costs. The blue sentences were directly from an old textbook.  

C. How demand or supply is affected by qty or price increase or
decrease. I get that the Demand curve is sloping downward and to the
right for postive. Supply is sloping upward to the right for positive. Are you talking about movements along the supply or demand curve?  I don't really know what to say, as the price goes up, a company is willing to supply more product. The company is willing to make more for higher prices and willing to make fewer at lower prices.  Demand is the opposite.  At higher prices, the market demands fewer, and at low prices the market demands more.

D. How to figure out if there is a surplus, overage, or equilibrium
with just a chart not a graph. This equation is a little tough for me.


I don't remember the equation.  I also don't know what you mean by overage.  A surplus is when there is more of a product supplied than what is being demanded.  If you just have a chart, can you make a graph from it?  For me, graphs were always helpful to better visualize the data.

E. How demand and supply determinates affect each outcome. Such as
how substitutes decision of the consumer would affect demand shift. Or  

With substitutes,  If the price of potatoes goes up, more rice will be demanded.  In this example, rice would be considered a substitute for potatoes.  





I hope that helped a little bit, and hopefully I remember everything correctly.  Its been over 3 yrs since I did any economics.  I am confused on the other questions you posted.  Am I right that that all of them except the last were multiple choice?  Is student answer your answer?  Do you need help with the ones that say good job next to them?  

"I hope that helped a little bit, and hopefully I remember everything correctly. Its been over 3 yrs since I did any economics. I am confused on the other questions you posted. Am I right that that all of them except the last were multiple choice? Is student answer your answer? Do you need help with the ones that say good job next to them? "



Yes, this does make sense. Sometimes things put in simpler terms helps out a lot. Thanks. The comments are sometimes not dumbed down enough to understand if you are teaching yourself. The questions at the bottom are multiple choice that I got wrong. The student answer is what I put. The good job is the correct answer for the problem. It's automated not teacher corrected.

Sorry I don't remember enough about elasticity to help on those.



Do you have the answers to this last question?  I am especially interested to see which category they put the hourly wages in for variable or fixed costs.  





 

"Free to Choose: A Personal Statement", by Milton & Rose Friedman.

http://www.amazon.com/Basic-Economics-4th-Ed-Economy/dp/0465022529/ref=sr_1_1?ie=UTF8&qid=1315956636&sr=8-1





 

All economics can be answered thusly:

"If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

- Ronal Reagan

I will get the answer to last question by the end of the week. Once I do I will post it. The most trouble I had was elasticity. I even You Tubed for some videos that helped somewhat. The instructor even stated that this is the most difficult concept to grasp but really didn't offer much help to questions from other students. Sorry to took so long to get back to you. Trying to get through the reading before I get ready for work tomorrow and turn-in for the night.

Thanks for the help, I really appreciate it.
This week we are discussing competition and how this affects markets. I'll see how this goes. Haven't gotten to the homework yet. Still plugging away at the reading and discussion questions.
Actually got a review outline for final. YEAH. Never got one for the mid-term. Instructor said he doesn't give out this one. Neither does he give out extra credit. Feels that this is not true examination for understanding of course. Really, I thought that this is what the quizzes, tests, homework, and final are for. Extra Credit is just that, extra credit.
I can't wait to critique this teacher.

Talk to you later,
Marie

THANKS...Just learning about this concept this week. Literally just read that paragraph.