Lectures 7 _ 8, feb 8 _ 10 - student version

Lectures 7 _ 8, feb 8 _ 10 - student version - the...

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1 Lecture 7: Demand Econ 100A Prof. Reynolds Watch the price change, watch demand change hats Golf clubs x 1 (p 1 1 ) x 1 (p 1 2 ) x 1 (p 1 3 ) x 1 (p 1 4 ) x 1 (p 1 5 ) p 5
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2 We can graph the relationship between x 1 and p 1 p 1 x 1 But economic convention has us switch the axes p 1 x 1 This is a __________________________ !!!
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3 Watch the income change, watch demand change hats Golf clubs x 1 (I 5 ) I 5 Hats Income
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4 Income demand of an inferior good x I Own-Price Demand for Normal & Inferior Goods
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5 Demand of a Giffen Good Cross price demand for x 2 x 2 p 1 p 1
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6 The Math #ormal: Inferior: Giffen: Substitutes: Complements:
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7 Demand Shifters Time Endowment: from Demand to Supply Demand for Leisure Supply of Labor
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8 Monetary Endowment: c 1 c 2 Interest rate=r Demand for loans & Supply of financial capital c 1 r
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9 Lecture 8 - Feb 10 th Consumer Surplus & Deadweight Loss Econ 100A Prof Reynolds Market demand: adding up consumers 2 ln x 1 + 3 ln x 2 x 1 x 2
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10 Graphically x 1 p Consumer Surplus Mathematically: p X
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11 Deadweight Loss:
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