Cougar Economics
Per ___
Partner’s Name__________________________
Name______________________________
Date _____/_____/_____
The Price of a Pair of Jeans—An Online Exploration Of Demand
http://ecedweb.unomaha.edu/Dem_Sup/demand.htm
Directions:Go to the Internet and type in the URL above. Some links at the site may no longer be active.
Then answer the questions as you follow Bob’s pricing predicament.
Part I
1.
What is Bob’s predicament?
2.
What did you find out about pricing from the “Company Site?”
3.
Why do the policies for “L” pricing seem high?
4.
What are the prices for “comparable products” at the Amazon?
5.
What are the prices for other jeans brands at Denim Discounters?
6.
What are prices for “googled” searches for jeans?
7.
What is the average price that you pay for jeans? What accounts for the differences in price that
Bob found from what you typically pay?
Question from Part I embedded in the website.
Bob considered every major element that determines how much of a
product a buyer purchases.
Review Bob's decision process. What are these elements or determinants of
amount purchased?
Part II Questions
1. What were the determinants in Bob’s purchase decision? (list all six—did you get them all
before?)
2.
What is a demand curve?
3.
What are the two axes on a demand curve?
4.
What is the income effect?
5.
What is the substitution effect?
6.
How might diminishing marginal utility affect Bob’s decision?
7.
What can cause a “shift in demand?”
Part III
1. How can “non-price determinants” affect shifts in the demand curve?
2.
What if Bob's tastes change, and he decides he actually prefers baggy shorts?
SCORE:
Review for the Quiz: After you finish this review, take the quiz and record your score.
First decide if the change affects demand, supply, or both, then decide how the price and quantity will be
affected. FOR EACH QUESTION YOU MUST ANSWER FOR PRICE AND QUANTITY!
1. If Jackie's income rises, what happens to her demand for airplane trips? If the income of most consumers
of air travel rises (and air travel is a normal good), what will happen to the market equilibrium price P and
quantity Q of this good?
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate
2. If the taste for sneakers severely declines, what happens to their price and the quantity sold?
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate
3. If the price of materials used to make sneakers rises sharply, what happens to the price and the quantity
sold of sneakers?
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate
4. If the technology for making some communications device (say, cellular telephones) leaps forward, what
is most likely to happen to the price and the quantity sold?
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate
5. Consider the supply and demand for coffee in London. Suppose the price of tea rises sharply. If coffee is
a substitute good for tea, what happens to the price and quantity of coffee?
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate
6. A new rumor sweeps the country that eggs are great diet food and they don't even cause cholesterol. At
the same time, advances in chicken husbandry increase the number of eggs that can be produced. What
happens to the price and quantity of eggs? (hint: both supply and demand are affected)
P Rises
P Falls
P Indeterminate
Q Rises
Q Falls
Q Indeterminate