Demand Practice Homework - Due Wednesday

Page 57 in McConnell

1. Explain the law of demand. why does a demand curve slope downward? What are the determinants of demand? What happens to the demand cure when each of these determinants changes? Distinguish between a change in demand and change in the quantity demanded, noting the causes (s) of each.

2. Key Question What effect will each of the following have on the demand for Product B?
a. Product B becomes more fashionable.
b. The price of substitute product C falls.
c. Income declines and product B in an inferior good.
d. Consumers anticipate that the price of B will be lower in the near future.
e. The price of complementary product D falls.

What I love about this video is that you will understand everything she is saying by the end of the year.

Production Possibilities Curve 24-33

Please take the time to review these pages over the weekend. There are certain concepts you should understand: Full employment, productive vs. allocative efficiency, law of increasing opportunity cost, shifts in the PPC.
Remember:

• Changes in what to produce results in movement along the curve
• Changes in technology and  quality and quantity of resources results in a shift

Page 27 deals with the Law of Increasing Opportunity Cost and the rationale for it. Please read it tonight.