Supply Chain and Logistics

It’s true there are no graphs on the homework answers for Chapter 3. That is not exactly an error. There are no additional graphs given in the answer book I have. The answers given do say how to move the line to get the answer, so any such revision of the graph given in the assignment itself would be an answer.

Here’s what I am thinking about for the exam on September 25th at our regular class time.

Chapters 1, 2, 3. Emphasis in chapter 3 on simple supply and demand curves and movement of them in response to economic factors.

Chapter 1: What does economics study? What is economic naturalism? Apply it to a simple situation. What are the four pitfalls and how do they apply to simple decision situations one might face? What is marginal cost and marginal benefit? Use it in a situation. What is the difference between normative and positive economic statements?
Chapter 2: What is absolute advantage, how do we calculate it? What is comparative advantage, how do we calculate it? Why should we do the things where we have comparative advantage? What is the production possibilities curve, how do we draw it from certain data, and interpreting efficient points and so on. What is the slope of the production possibilities curve– interpret it! What happens if technology allows an increase of productivity? Working problems!

Chapter 3: How to plot a demand curve from data. How to plot a supply curve. How to find equilibrium price and quantity using a graph or using algebra if you have equations. Demonstrate excess supply or excess demand on a graph. What might cause it (examples)? What does it mean when the graph of supply or demand moves to the left or right? What factors might cause such a move? What is the economic surplus, consumer and producer, and how do we find it on a graph? Why do we say that the equilibrium is economically efficient? What is left out of the picture when we have economic efficiency? Is equilibrium better for society? Under what conditions? Work plenty of problems for this chapter.

Here’s the rundown on my plan for week 3.  We’ll start by working a couple of problems from the end of chapter 2 just to make sure we understand this stuff about comparative advantage.  Then we will proceed into chapter 3 on supply and demand, probably the last half of the class on Monday. I am going to plunge right in and talk about the graphs and forms rather than the long slow buildup in the chapter. this model of behavior is one of the most important and forms a basic knowledge set for economics.

We will also see how to derive a demand curve in practice, probably on Wednesday, by conducting an experiment in class.  Bring money.

We will continue with Ch 3 on Wednesday, with a lot of emphasis on interpreting graphs of supply and demand, and what it means for demand to increase or decrease, supply to increase or decrease.  We will try some problems also.

We will spend a few minutes Friday reviewing for the exam, which will cover Chapters 1, 2, and 3.  It will be Monday the 25th, part multiple choice and part writing things out.  There will be problem solving.

See you in class.