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Economic Concepts Worksheet

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Economic Concepts Worksheet
Economic Concepts Worksheet
Concept
Application of Concept from Personal Experience

Reference to Concept in Reading
Law of Supply.

As a consequence of higher raw milk costs, we have seen a related increase in shrink costs and reduced profits from excess cream sales. At the same time, sales volumes in the Dairy Group have softened as consumers react to the higher retail prices. We are also seeing a shift from our branded fluid milk products to private label products resulting in reduced gross profit. In our White Wave segment, results continue to be negatively impacted by the oversupply of organic milk.” (William Trent, shareholder of Dean Foods & Hershey 's , Starbucks )
Relationship that prevails between price and quantity supplied.
As price rises, the quantity supplied rises; as price falls, the quantity supplied falls. This relationship is called the law of supply.
(The McGraw-Hill,
Economics: Principles, Problems and Policies, Cp., 3,
Campbell R. McConnell, Stanley L. Brue).
Law of Increasing Opportunity Cost.

Opportunity cost is what people give up when they make a decision. Every athlete only has a finite amount of time to train for a given sport, and most athletes eventually devote their energies to just one. If athletes do not choose a favorite early enough, they run the risk of being good at a lot of sports but not great at any one of them. (David Roy, The Oldest College Newspaper in Southern California). The amount of other products that must be forgone or sacrificed to obtain 1 unit of a specific good is called the opportunity cost of that good.
( The McGraw-Hill.
Principles, Problems and Policies, Cp., 2,
Campbell R. McConnell, Stanley L. Brue).
Money
Income and substitution effects.

Pfizer laboratories for example, have many drugs and medicines. One of the most popular it is the blue pill, Viagra.
Because it is expensive, consumers with less income, prefer Sildenafil Citrate and Generic



References: Campbell R, McConnell, Stanley L. Brue. Economics: Principles, Problems and Policies, Cp., 1, 2,& 3. The McGraw-Hill, 2004. Roy, David. Applying Economics to Sports, Opportunity Cost http://www.tsl.pomona.edu/ Zuniga, Jeane, the Air conditioned market for U.S. exporters. www.usatradeonline.gov

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