Febuary 4 - Schedule for the Week Today Supply and Market...

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1 Microeconomics Principles February 4, 2008 Supply: Part 2 Schedule for the Week Today – Supply and Market Equilibrium z HW #2 DUE! Wednesday - Wrap up and Review for exam (any unfinished material) Friday – EXAM #1 z Review Session Thursday z Study Guide is on-line Monday (2/11) – NO CLASS Today’s Outline Refresher Supply (chapter 3 pgs. 51-61) Market Equilibrium z Consumer and producer surplus z If time, price floor and ceiling REMINDER: HW#2 DUE TONIGHT Supply Chapter 3 (pgs. 51-61) Supply Rocks! 6 5 4 3 2 1 0 Quantity Supplied (bushels per week) Price (per bushel) 10 20 30 40 50 60 70 S 1 Why does the graph look this way? Law of Supply Firm’s Marginal Cost Law of Diminishing Returns Two Ideas Change in Quantity SUPPLIED z Move along curve z Change in Quantity Supplied in response to change in Price Change in SUPPLY z Shift curve z Change in Supply due to change in one of the ‘all else equal’ factors z Ex: costs of factors of input
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2 Demand SUPPLY SUPPLY SUPPL Y = + Market Equilibrium 6 5 4 3 2 1 0 2 4 6 8 10 12 14 16 18
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Febuary 4 - Schedule for the Week Today Supply and Market...

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