Demand/Supply diagrams?

[xXNovaxX]

Hi just wondering our texttbook (eco down under/morris) uses AS-AD diagrams, you know, those curvy weird ones with GDP at the bottom, and price on the left side. Well in my study guide, and exams ive never seen them mentioned.

So does anyone think we need to know them? Because i'm not 100% confident with them (though they are sort of straight forward/easy), but yeah, do you think it would come up in the exam?

LOL. I mean that you don't think a question would come up saying "heres the situation.....now draw an AS-AD....describe it.....etc etc"

[ReVeL]

Economics is kinda funny in that they use the indepedant variable (price) on the y-axis and the dependant variable (quantity) on the x-axis.

But in relation to your questions, I'm fairly sure that you only have to worry about the demand/supply diagrams with quantity on the x-axis and price on the y-axis. Furthermore, it's pretty unlikely you'll be asked to draw diagrams in the exam at all. They usually pop up in the multiple choice section, just requiring some basic analysis.

[AppleXY]

What. Why would Quantity be dependent? The amount of quantity produced/demanded determines the price, not the other way? (like the amount of quantity consumed determines utility)

It could appear in the exam, but if it does it wouldn't be that complex of a question imo.

[ReVeL]

What. Why would Quantity be dependent? The amount of quantity produced/demanded determines the price, not the other way? (like the amount of quantity consumed determines utility)

It could appear in the exam, but if it does it wouldn't be that complex of a question imo.

Umm, that's not the way I understand it.

If I set a price of $x, the that DETERMINES quantity demanded, and also it DETERMINES the quantity firms are willing to supply.

So, the level of demand and supply is dependant on the price. It wouldn't work the other way, because it's not like suppliers or consumers just "choose" a quantity and the price adjusts as a result. Thats the way I see it.

[AppleXY]

What. Why would Quantity be dependent? The amount of quantity produced/demanded determines the price, not the other way? (like the amount of quantity consumed determines utility)

It could appear in the exam, but if it does it wouldn't be that complex of a question imo.

Umm, that's not the way I understand it.

If I set a price of $x, the that DETERMINES quantity demanded, and also it DETERMINES the quantity firms are willing to supply.

So, the level of demand and supply is dependant on the price. It wouldn't work the other way, because it's not like suppliers or consumers just "choose" a quantity and the price adjusts as a result. Thats the way I see it.

hmm. Yeah, when you put it like that I guess P does seem like the independent variable. I just thought with utility curves that the quantity would be independent, because it determines how much utility you have at any given time.

But yeah, the Price at any given point in time determines the amount of quantity demanded and supplied in competitive markets. 

[Collin Li]

Yep, prices are independent - quantities are dependent (on price)

For a utility function u(q), q is independent, but since q is dependent on p, i.e.: q = q(p), then u = u(p)

[AppleXY]

Yep, prices are independent - quantities are dependent (on price)

For a utility function u(q), q is independent, but since q is dependent on p, i.e.: q = q(p), then u = u(p)

Wow! Intuitive.