supply_and_demand_II_-_comparat

supply_and_demand_II_-_comparat - wages for unskilled labor...

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Supply and Demand The Method of Comparative Statics
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The Basics Demand is the marginal benefit The law of demand Market demand Supply is the marginal cost The law of supply Market supply Market clearing equilibrium Allocation of resources What is produced? How? And for whom? Efficiency MB = MC; low MC; high MB
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P Q D = MB S = MC Surplus Market Equilibrium
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The Method Start with an equilibrium Shift one curve Think first Shift either supply or demand Partial equilibrium analysis Find the new equilibrium and compare Higher price? Larger quantity?
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What Supply and Demand Can Answer What is the effect of ___________ This is the independent variable It causes the change It is an exogenous change On the market for ___________? Price and quantity are the dependent variables They respond to the exogenous change They are endogenous variables
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Illegal immigration and the
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Unformatted text preview: wages for unskilled labor P Q S = Workers D = Employers Q1 P1 S = Workers Q2 P2 Baby-boomer retirement and national savings and rates of return P Q S = Savers D = Borrowers Q1 P1 S = Savers Q2 P2 Oil prices in the 1970s P Q S = Oil Producers D = Oil Consumers Q1 P1 S = Oil Producers Q2 P2 Oil prices last year P Q S = Suppliers D = Buyers Q1 P1 Q2 P2 Credit problems and the housing market P Q S = Sellers D = Buyers Q1 P1 D = Buyers Q2 P2 Oil prices and SUVs P Q S = GM/Ford/Toyot a D = Buyers Q1 P1 Q2 P2 D = Buyers Oil prices and Hybrids P Q S = GM/Ford/Toyot a D = Buyers Q1 P1 Q2 P2 D = Buyers Inequality and Saks Inequality and Wall-Mart Inequality and Wards, Hudsons,Marshall Fields, Hechts etc. The birth rate and the decline of the cities in the 1950-1970s The birth rate and the future of cities...
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supply_and_demand_II_-_comparat - wages for unskilled labor...

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