Chapter3CircularFlowModel.ppt

More practice Suppose that short skirts that were fashionable in the 1990s became unfashionable in the late 2000s. If other factors were held constant, then there would be:a. a rightward movement along the supply curveb. a rightward shift of the demand curvec. a leftward shift in the demand curved. a leftward movement along the supply curve Assuming that turkey, chicken, pork and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal:a. reduce demand for chicken, pork and beefb. Leave demand for chicken, pork and beef unchanged c. Increase demand for chicken, pork, and beef d. Increase quantity demanded of beef Kiley is my best friend… She Supplies a lot of love! ? Chapter 3 Circular Flow Model Supply and Demand What Determines a Person’s Income in the Market? This means… what is the value of the human being? Determined by: a) value of their product…. Rock singer, athlete, Shaq, Oprah, department store clerk, insurance salesman, teacher b) supply and demand…. If lot of people doing same things you are… not likely to be paid much.(underwater welders) (dangerous- coal mining) (oil rigs) ……. As demand for product decreases, reduces number of available jobs… gas station jobs! c) if demand for product lacking- rewards minimal and number of competing workers is few, demand high, wages high. 20 years ago… heart surgeons Who Determines the value of a product? The value of the product is the worth that society puts on it…. What worth does society put on sports? What worth does society put on music industry? What worth does society put on sport cars, SUVs, large houses, motorcycles, eating out, designer clothes, entertainment. Etc, etc. etc. Education? Characteristics of Recession/Inflation Recession: Businesses not selling what it produces Inventories accumulate Businesses then cut down on employment (hence unemployment/layoffs) Inflation: Government and investors spending more Inventories begin to