september-12

september-12 - Dr. Duffy Microeconomics The end of CHAPTER...

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Dr. Duffy Microeconomics The end of CHAPTER 3 Frank and Bernanke With supplemental material
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Market Equilibrium A market equilibrium comes at the place where quantity demanded equals quantity supplied. Equilibrium takes place at the intersection of the supply and demand curves.
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Market Equilibrium Equilibrium A system is in equilibrium when there is no  tendency for it to change Market Equilibrium Occurs in a market when all buyers and  sellers are satisfied with their respective  quantities  at the market price
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Market Equilibrium What Do You Think? Is the market equilibrium always an ideal  outcome for all market participants? Would buyers prefer a lower price than the  equilibrium price? Would sellers prefer a higher price than the  equilibrium price?
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Movements of Curves An increase moves demand (or supply) to  the right. A decrease moves demand (or supply) to  the left. Think in terms of right and left, not up and  down, when shifting curves.
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Predicting and Explaining Changes In Prices and Quantities Distinguishing Between: A change in the quantity demanded A movement along the demand curve that occurs  in response to a change in price A change in demand A shift of the entire demand curve
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An Increase In Quantity Demanded vs. An Increase In Demand Price ($/can) Quantity (1000s of cans/day) 5 2 3 4 1 4 12 2 6 0 10 6 8 Increase in quantity demanded D
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An Increase In Quantity Demanded vs. An Increase In Demand Price ($/can) Quantity (1000s of cans/day) 5 2 3 1 4 12 6 0 Increase in demand D D D’ D’
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Predicting and Explaining Changes In Prices and Quantities Change in the quantity supplied A movement along the supply curve that  occurs in response to a change in price Change in supply A shift of the entire supply curve
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An Increase In Quantity Supplied vs. An Increase In Supply Price ($/can) Quantity (1000s of cans/day) 5 2 3 4 1 4 10 2 6 0 6 8 S S Increase in quantity supplied
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An Increase In Quantity Supplied vs. An Increase In Supply Price ($/can) Quantity (1000s of cans/day) 5 2 3 4 1 4 10 2 6 S 0 6 8 S S’ S’ Increase in supply
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Predicting and Explaining Changes In Prices and Quantities Economic Naturalist When the Federal Government implements a  large pay increase for its employees, why do  rents for apartments near Washington Metro  stations go up relative to rents for apartments  located far away from Metro stations?
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september-12 - Dr. Duffy Microeconomics The end of CHAPTER...

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