Wednesday, September 13, 2006 Microeconomics Air Quality 4 3 2 1 MC MC curve Is <a href="/keyword/upward-sloping/" >upward sloping</a> Textile prod. 1 2 3 4 5 air quality MC Good 1 Will have a straight line because the MC is constant Good 2 MC of Good 1 MC Good 1 MARGINAL BENEFIT EXAMPLE MB MB curve is <a href="/keyword/downward-sloping/" >downward sloping</a> First one is really satisfying then slowly gets less thirsty 1 2 3 4 5 Glasses of lemonade Wednesday, September 13, 2006 MARGINAL COST AND MARGINAL BENEFIT Air Quality 0 1 2 3 4 5 MC MB 600 300 200 Total Cost 0 100 300 600 1000 1500 MC 100 200 300 400 500 Total 0 1000 1600 1900 2000 2050 MB 1000 600 300 100 50 MB/MC 900 300 0 -300 -450 1 2 3 4 5 3 is the optimal or efficient amount Supply and Demand- A study of markets Market = A group of buyers and sellers of a particular good or service Buyers and Consumers = the demand for the good Sellers, Producers = the supply of goods and servicies