Chapter 4 - AGEC 105 Chapter 4: Consumer Equilibrium and...

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Chapter 4: Consumer Equilibrium and Market Demand AGEC 105
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Quiz 1 Count: 121 Average: 20.0 Median: 20.0 Maximum: 25.0 Minimum: 3.8 2
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Announcements Quiz 2, Friday, September 24, Chapters 3 and 4 Exam 1, Wednesday, September 29, Chapters 1, 3, 4 and 5 Review sessions, Tuesdays, Blocker 113, 7:30-9:30pm Review problems are posted on E-LEARNING
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4 Topics of Discussion DERIVING A DEMAND CURVE MARKET DEMAND THE LAW OF DEMAND CHANGES IN DEMAND CONSUMER SURPLUS http://www.focus.com/images/view/7362/
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5 Demand Model Single most useful tool of economic analysis Explains how prices of goods and quantity bought and sold are determined in certain types of markets In our previous lecture we talked about the indifference curves and how changes in income and prices will affect individual’s utility
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Number of Concerts per Month Number of Movies per Month 5 4 3 8 5 10 10 6 20 Change in Price D K J 1. When the price of concerts is $20, MRS m,c = P c /P m at Point D. 2. But when the price of concerts falls to $10, this condition is satisfied at point J. Number of Concerts per Month Price per concert $5 3 8 5 $20 $10 D K J 3. The demand curve shows the quantity of concerts Max chooses at each price for concerts. 6
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Markets Market: Buyer and seller of a particular good and service Competitive market: A market in which there are many buyers and many sellers so that each has a negligible impact on the market price Perfectly competitive markets: In addition to “many buyers and sellers” the goods offered for sale are all the same. Imperfectly competitive markets:
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Chapter 4 - AGEC 105 Chapter 4: Consumer Equilibrium and...

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