Current Events:
Troy University professor Christopher T. Warden, the author of an upcoming textbook that Accuracy in Academia is publishing, explains why college tuitions are so high. Hint: It's not because of a lack of government funding.
The Board of Regents on Thursday approved a 32 percent increase in undergraduate student fees, despite protests by hundreds of demonstrators outside the regents' meeting at UCLA.
Chapter 5 Elasticity
The concept of elasticity is thoroughly covered in this chapter, from the definition, to the calculation, and finally to the application. Price elasticity of demand is covered first, followed by income and price elasticities. The price elasticity of supply is covered, and the chapter concludes with an analysis of tax burdens based on differences in the price elasticities of demand and supply.
We can re-assemble in our small groups to discuss and answer.
If you join Dabbleboard (Cf. http://www.dabbleboard.com/); you can draw your graphs online instead of on the board. You can share graphs and chat online as well as use Dabbleboard for your Small Group collaborations.
Post any questions on the content now that we reviewed the material:
Ch. 5 True/False Review; likewise, if you have questions, add them to Shanawiki and we can address them.
We were on #2 on the Ch. 5 Short Answer Review questions.
Ch. 5 Objective Review
We can also consider Hubbert's Peak
Hubbert’s Peak: Are We Running Out of Oil?
In the mid-1950s, Marion King Hubbert (a geophysicist who worked at Shell
Research Labs) created a model of known reserves of U.S. oil and predicted that production in the United States would peak in the early 1970s. The model suggests
that production will peak again in the next decade.
While there are many reasons to believe that oil prices will continue to be high in
the future, the analysis of markets and of elasticity suggests that we are unlikely to run out of oil for a long time, if ever. According to the estimates provided in the text, while the short-term elasticity of demand for gasoline is roughly 0.2, the long-term elasticity is about 0.7. Given more time there can be greater adjustment to higher oil prices, including finding substitutes.
We are working towards the Test, Ch. 5 Multiple choice; and, we can begin Chapter 6.
Chapter 6 Overview Consumer Choice and Demand
The analysis of consumer choice in this chapter begins with the consideration of the
budget line. Total and marginal utility are then introduced and discussed, and an
incremental process is detailed through which a hypothetical consumer (and the
students) can see the utility-maximizing combination of two goods. The derivation
of the demand curve is then presented and the chapter concludes with a discussion
of consumer surplus. For instructors who wish to use indifference curves in the
analysis of consumer optimization, a detailed appendix is provided.
HW: gmsmith@shanahan.org
Chapter 5 Elasticity
1. Finish the final Short Answers Review and Objective Review questions in Chapter 5 posted on Shanawiki if we do not finish in class. Use the Shanawiki space to collaborate outside of class and post suggested answers which we will then review in class. Cf. http://shanawiki.wikispaces.com/.
2. If you join Dabbleboard (Cf. http://www.dabbleboard.com/); you can draw your graphs online instead of on the board. You can share graphs and chat online as well as use Dabbleboard for your Small Group collaborations for the T/F, Short Answer, and Objective Questions as well.
3. Read Chapter 6.
