PAM_2000_Spring_2009_Lecture_1

PAM_2000_Spring_2009_Lecture_1 - PAM 2000 Lecture 1 Agenda...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
    PAM 2000 Lecture 1 Agenda: Marginal analysis: non-market examples Demand Curves Demand Shifters Supply Curves Supply Shifters Market Equilibrium
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
    Reading for PAM 2000 Perloff, Ch. 1 and 2 M,B,N Ch. 1-20.
Image of page 2
    Demand Curves Let’s look at a specific economic relationship: The Demand Curve Say for cars at a dealership, we observe data: PRICE / # CARS SOLD per week $20,000 5 $16,000 10 $12,000 15 10,000 20
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
    Demand Curves (con’t) Graph of data shows a “demand curve” or “demand schedule” for cars at this dealership: Which is the dependent and which is the independent variable? Dependent versus independent variables are traditionally reversed for demand graph!
Image of page 4
    Demand Curves (con’t) Def’n. of the demand curve: A demand curve shows the quantity of a good buyers are willing to buy at various prices, ceteris paribus , such as the income of buyers, price of substitutes, etc. Reflects the “Law of demand”: As the price of any good rises, the quantity purchased of the good falls, ceteris paribus .
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
    Demand Curves (con’t) Market Demand Curves are simply all the individual demand curve summed up We are usually interested in market demand curves. But it is still driven by individual choices
Image of page 6
    Demand Shifters Now say income of car buyers rises (an exogenous increase): Changes from average income of $40,000, to average income of $80,000 Q: How will the quantity demanded change??
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern