Bert hamminga    Control questions on   Supply and Demand    000213
  1. What do you need to know in order to understand what the fundamental Supply and Demand model means?

    2.  

    Suppose q = S (p), q = D (p,t), S en D are linear, dS / dp > 0, � D / � t > 0, and � D / � p � d S / d p.

  2. What theorem follows from these assumptions on how p reacts 1) on t rising 2) on t falling?
  3. Illustrate your answers with the familiars graph and shifting curves.
  4. Explain the problem of applying the model to the market  of shoes
  5. What does the theorem mean?
  6. What circumstances would constitute a test of this implication?
  7. What are good reasons to be a supporter of this model?
  8. What are good reasons to be a critic of this model?
  9. List the main things that need to be done to make the model more realistic.
  10. Explain the types of analysis called statics, comparative statics and dynamics with the help of the supply and demand model.