Lecture+4+September+15

Lecture+4+September+15 - Today’s Agenda • Equilibrium...

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Unformatted text preview: Today’s Agenda • Equilibrium price and quantity in the supply and demand model • Comparative statics • The rationing and signaling functions of prices Need to find your lost clicker ID? • See me after class today with your clicker, pencil, and paper in hand. Marginal magnitudes mean much in microeconomics • Demand curve represents marginal willingness to pay . • Is there a counterpart for supply? • If suppliers are profit maximizers, they compare marginal revenue with marginal cost. • Supply curve represents marginal opportunity cost . Distinguish: • change in quantity demanded • movement along the demand curve • results from a change in the good’s own price Distinguish: • change in quantity demanded • movement along the demand curve • results from a change in the good’s own price Q $/Q D Distinguish: • change in quantity demanded • movement along the demand curve • results from a change in the good’s own price • change in demand • shift of the demand curve • results from a change in any other determinant of demand Q $/Q D Distinguish: • change in quantity demanded • movement along the demand curve • results from a change in the good’s own price • change in demand • shift of the demand curve • results from a change in any other determinant of demand Q $/Q D Distinguish: • change in quantity supplied • movement along the supply curve • results from a change in the good’s own price Distinguish: • change in quantity supplied • movement along the supply curve • results from a change in the good’s own price Q $/Q S Distinguish: • change in quantity supplied • movement along the supply curve • results from a change in the good’s own price • change in supply • shift of the supply curve • results from a change in any other determinant of supply Q $/Q S Distinguish: • change in quantity...
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This note was uploaded on 10/25/2011 for the course ECONOMICS 01:220:102 taught by Professor Prusa during the Fall '10 term at Rutgers.

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Lecture+4+September+15 - Today’s Agenda • Equilibrium...

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