Blog M11 and M12 Blog5

Microeconomics
1. Microeconomics is the study of decisions that businesses and individuals make regarding allocation of resources and prices of goods and services.
Facebook Lingo- Microeconomics is wen ppl make decisions bout resources & the stuff we buy.


Role of Money
1.Unlike play money real money can actually be spent in exchange for a good or service. Play money has no actual value to it. Play money has no store of value.
2.I do not have a most prized possession. But, if I did- in example my most prized possession is my car; I would be willing to accept a coin collection or something that I could use a store of value to allow it to be my most prized possession in the long run.


Circular Flow Model- M11
1.A circular flow tells us that input from each sector and to each sector on production and thus goods and services are created.
2. The role of household is to pay taxes and labor to the government and give labor and payments to the businesses.
3. The role of business is to give income, goods and services to the household and to pay taxes, goods and services to the government.
4. The role of government is to give service and income to the household and to give service and payments to the businesses.
5. The households supply labor and other factors of production that are sold on resource markets.


Law of Demand and Law of Supply- M12
1.A. The demand for chicken would increase because people would use chicken as a substitute for beef that has an issue with mad cow disease, which would cause the supply curve to shift to the right for chicken and to the left for beef.
B. The supply of orange juice would decrease if Florida is hit with severe weather because Florida is one of the main suppliers for orange juice, and the supply curve would shift to the left because of the shortage of oranges there would be.
C. If 30% of coffee bean crops are destroyed the supply of coffee would decrease because as much coffee would not be able to be produced with the lack of crops, which means the supply curve would shift to the left.
D. The supply of cereal would increase and the price would also increase. Therefore the demand for cereal would decrease and the supply curve would shift to the right.

2.A.The price of doughnuts would decrease if they were to cause high cholesterol in adults because the demand for them would decrease. this makes the equilibrium quantity also decrease because they would not be consumed as much as before.
B.If widespread unemployment continued, the market for doughnuts would decrease because they would have to decrease the price of doughnuts because of the effect unemployment has on the income of the consumers. This will cause the equilibrium quantity decrease.
C. If Krispy Kreme introduces a low calorie doughnut the price would increase because the demand for the doughnuts would increase. This would cause the equilibrium quantity to increase because they would be willing to produce more if they are able to charge more for them.
D.Factors that can change the quantity supplied are price- if the price of an item is cheap then the item would not be produced as much as it would if the price was higher. Demand- the more the consumers demand a product the more the suppliers would produce.


Reflection1. Really didn't get how to explain how real money differs from play money instead of the fact that it isn't real and can not be actually spent or exchanged.
2.How do I explain the changes to equilibrium quantity and price in a scenario.