Study_Materials - very little change in demand based on a...

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1) AEM Review for Final! 2) Think about markets as a way of conveying information though pricings. Each person is going to act in his or her own interest. In terms of own personal benefits and own personal costs. People will keep trading and trading, until there is an efficient point. This is where we maximize net economic surplus. Economists really focus on efficiency. 3) D=MB=AR=WTP S=MC=MPC Movement Along the demand curve= movement is only when price and or quantity changes Shift in or out of the demand curve, all other things… Ceteris Peribus 4) %Qd/ %P or (Change in Q/Q)/ (Change in P/P) typically inelastic goods should be taxed Relatively Inelastic means that there is
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Unformatted text preview: very little change in demand based on a change in price. Much larger deadweight loss on the elastic graph than the inelastic. This minimizes the efficeny loss when there is a tax added 5) DWL= an inefficacy due to a relative tax 6) To reduce energy use the most, youd tax the elastic because it gets the greatest responsivness based on a change of price. Malthus- populaions would outgrow food supplies keeping the masss of people perpetually at a subsistence standard of living To have economic growth gdp must rise faster than population growth...
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This test prep was uploaded on 02/01/2009 for the course AEM 2500 taught by Professor Poe,g. during the Fall '07 term at Cornell University (Engineering School).

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