01 Oct Demand, Supply, and Elasticity
ECON312 Principles of Economics
Week 2 Discussion
Demand, Supply, and Elasticity
1. Law of Demand
Explain the law of demand. Why does a demand curve slope downward? Illustrate with an example.
2. Determinants of Demand
What are the determinants of demand? What happens to the demand curve when any of these determinants change? Distinguish between a change in demand and a movement along a fixed demand curve.
3. Rationing Function of Prices
An important concept in demand and supply is the rationing function of prices. What do economists mean when they say, “price floors and ceilings stifle the rationing function of prices and distort resource allocation”? Explain with an appropriate example.
4. Price Elasticity of Demand
What are the major determinants of price elasticity of demand? Use those determinants and your own reasoning in judging whether demand for each of the following products is probably elastic or inelastic: (a) bottled water; (b) toothpaste; (c) Spam; and (d) Heinz ketchup.
5. Current Event: COVID-19
Research has shown that face coverings decrease the spread of the novel coronavirus, COVID-19. As such, 2020 saw several changes in the market for these masks (and possibly beyond). Explain, in your own words, how the factors of demand and supply have influenced this market by submitting a one- to two-slide narrated PowerPoint file or a short video.
