Posts tagged microeconomics
Data Response–Champagne, Supply and Demand
Dec 13th
Credit: I came across this useful practice data response question via a student’s blog associated with this teacher’s site: http://www.peteranthony.org/wordpress/
Image: Some rights reserved by epicxero
I think this is an excellent introduction to this 3rd paper which forms part of the IB Economics final assessment. The questions are straightforward, but you will need to pay close attention to the markscheme for these kinds of questions, which usually follow the same format.
1) The article (data to which to respond):
UK Newspaper, Daily Mail, on Champagne price decreases, October 2009
2) The questions
1. Define the following terms: a) demand, b) supply [4]
2. Using an appropriate diagram, explain one reason for why the price of a bottle of champagne has fallen? [4]
3. Using an appropriate diagram, explain one reason for why the price of champagne will probably rise next year? [4]
4. Using information from the text and your knowledge of economics, evaluate a decision not to raise the price of a bottle of champagne over the coming months before Christmas. [8]
Revenues –Total, Marginal and Average
Dec 2nd
By now you should understand the graphs for
a) Total Product (b) Average and Marginal Product (c) FC, VC and TC (d) AFC, AVC, ATC, MC
You should also recognise the ultimate assumption of firms – profit maximising
Now we turn to revenue.
Image: Some rights reserved by saturnism
You now need to:
- Recap on the difference between perfect competition and monopoly market structures
- Understand the different equations for cost and the equations for calculating revenue
- Understand the behaviour of revenue for a monopoly (a price giver acting in imperfect comp) (this includes relevant graphs, trends of graphs and explanations (you might also possibly recognise the role of elasticity)
- The same as above, but for Perfect Competition
- Understand the purpose of studying revenue and how relates to previous learning on output / product and costs
First of all, recall the main differences between monopoly and perfect competition:
Now make sure you know the Golden Equations – complete this work sheet before moving on:
Golden Equations MS Word version
Golden Equations Google Doc version – make your own copy before you can edit
Now attempt to complete this spreadsheet worksheet. Take your time – work through it slowly and deliberately. There are two tabs to complete, one for monopoly situation (first) and one for perfect competiton. You might like to research a little to help give as full answers as possible for the text boxes.
Once you have checked through your answers to the above, you can review your overall understanding with this video:
Revenue Curves For Firms by pajholden
Finally, you should practice drawing the curves you have learned using the activities above and then try to annotate them with their key features and explanations
