1.) Using what you learned about the three functions of money, explain how 'play money' differs from 'real' money?
you can't spend play money ,play money has no functions , but real money most important function is the medium of exchange because it facilitate transactions .In order for real money to hold its value overtime , it must be a store of value.Real money also has a unit of account when goods and services are being exchanged.
2.)Money has no actual value other than the value we attach to it. The barter system would still be practiced today if the participants did not agree to set a value on a piece of printed paper that represented the value of the goods and services they had to offer. What would you accept in place of money, if someone wanted to 'buy' your most prized material possession?
My most prized material is my clothes and the only thing i would accept other than money for it is my own place to live.
1.)What does a circular flow model tell us?
shows us that the input from each sector to each sector spurs on production and goods and services that are created.
2.) What is the role of households in the three sector circular flow model?
the role of households pay taxes to the government and the households gives the businesses labors and payments.
3. What is the role of businesses in the three sector circular flow model?
the role of the business is to pay taxes and give goods and services to the government .Business also gives income and goods and services to the households.
4. What is the role of government in the three sector circular flow model?
the government provides services and payments to the business and services and income to the households.
5. What role do households have in the factors or resource market (inputs)?
the households are the factor market which means households produce factors of production.
Title: Law of Demand and Law of Supply - M12
For each event described below, explain what happens to either the demand or supply curve. (increase/decrease? Shifts left or right?)
the demand curve
(a) What happens to the demand for chicken if concerns about mad cow disease lead to widespread euthanizing of cows on U.S. cattle farms?
the demand for chicken will increase and the demand for cattle will go down due to the mad cow disease crisis.
(b) What happens to the supply of orange juice if Florida is hit with very severe weather?the supply of oranges will go down which will cause the production of orange juice to decrease.
(c) In the market for coffee, severe global weather systems destroy 30% of the coffee bean crop.
the supply for coffee will go down and the price will of the coffee will go up.
(d) In the market for cereal, if the price of cardboard material used to package cereal increases.
if the price of cardboard material used to package cereal increases then the supply for cereal increases also.
2. For each part below, EXPLAIN what happens to equilibrium quantity and price (increase or decrease?)
you can't spend play money ,play money has no functions , but real money most important function is the medium of exchange because it facilitate transactions .In order for real money to hold its value overtime , it must be a store of value.Real money also has a unit of account when goods and services are being exchanged.
2.)Money has no actual value other than the value we attach to it. The barter system would still be practiced today if the participants did not agree to set a value on a piece of printed paper that represented the value of the goods and services they had to offer. What would you accept in place of money, if someone wanted to 'buy' your most prized material possession?
My most prized material is my clothes and the only thing i would accept other than money for it is my own place to live.
1.)What does a circular flow model tell us?
shows us that the input from each sector to each sector spurs on production and goods and services that are created.
2.) What is the role of households in the three sector circular flow model?
the role of households pay taxes to the government and the households gives the businesses labors and payments.
3. What is the role of businesses in the three sector circular flow model?
the role of the business is to pay taxes and give goods and services to the government .Business also gives income and goods and services to the households.
4. What is the role of government in the three sector circular flow model?
the government provides services and payments to the business and services and income to the households.
5. What role do households have in the factors or resource market (inputs)?
the households are the factor market which means households produce factors of production.
Title: Law of Demand and Law of Supply - M12
For each event described below, explain what happens to either the demand or supply curve. (increase/decrease? Shifts left or right?)
the demand curve
(a) What happens to the demand for chicken if concerns about mad cow disease lead to widespread euthanizing of cows on U.S. cattle farms?
the demand for chicken will increase and the demand for cattle will go down due to the mad cow disease crisis.
(b) What happens to the supply of orange juice if Florida is hit with very severe weather?the supply of oranges will go down which will cause the production of orange juice to decrease.
(c) In the market for coffee, severe global weather systems destroy 30% of the coffee bean crop.
the supply for coffee will go down and the price will of the coffee will go up.
(d) In the market for cereal, if the price of cardboard material used to package cereal increases.
if the price of cardboard material used to package cereal increases then the supply for cereal increases also.
2. For each part below, EXPLAIN what happens to equilibrium quantity and price (increase or decrease?)
.In the market for doughnuts, if they were found to be a major contributor to high cholesterol in adults. the supply for doughnuts will go up and the price will go up because a lot of people like doughnuts. In the market for doughnuts, if widespread unemployment continues.
then doughnut businesses will go out of business.
In the market for doughnuts, if Krispy Kreme introduces a new whole wheat 'low-calorie' doughnut. the krispy kreme probably would make a bigger profit but the business will increase.
3. What are two factors that can change the quantity demanded? Provide an example for each.
the price can change the quantity demand
then doughnut businesses will go out of business.
In the market for doughnuts, if Krispy Kreme introduces a new whole wheat 'low-calorie' doughnut. the krispy kreme probably would make a bigger profit but the business will increase.
3. What are two factors that can change the quantity demanded? Provide an example for each.
the price can change the quantity demand
