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Unformatted text preview: Real Estate Notes: Marginal Principle: If Marginal benefit is more than Marginal Benefit … DO MORE Optimization: MC = MC Economic efficiency I where the MB and MC intersect A demand curve is a MB curve. It is negatively sloped. Substitution effect: consumers switch to other products. Income Effect: Holding Income Unchanged , at higher price, comers can afford less. A Supply curve is a MC curve it is positively sloped in the short run. More Supply higher price per unit. As an industry expands drives up the price of scarce materials. (Oil, Labor) Product Markets: Equilibrium Prices and Quantities change due to changes in S&D Demand changes because of changes in ( Income, P of substitute and complimentary, preferance/taste, population) Supply changes because of changes in input prices, labor productivity, technology. Consumer Surplus is the sum of what… ( Upper Triangle in Graph 1) Producer Surplus is sum of ( lower triangle on graph 1 ) Market Surplus ( Consumer surplus + Producer Surplus )...
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This note was uploaded on 10/23/2009 for the course ECON 420 taught by Professor Staff during the Spring '08 term at University of Wisconsin.
- Spring '08