Midterm 1 index card topics_3

# Midterm 1 index card topics_3 - MSC; if the marginal...

This preview shows pages 1–2. Sign up to view the full content.

1. Law of D – the higher the P of a good, the smaller is the Q D ; and the lower the P of a good, the greater is the Q Q D ↓ ; P Q D 2. Movement along D curve = ∆ Q D 3. Shift in D Curve = ∆ D 4. Competitive market – many buyers and many sellers; no one participant will alter price 5. Law of S the higher the P of a good, the greater is the Q S ; and the lower the P of a good, the smaller is the Q S Q S ↑ ; P Q S 6. Movement along the S curve = ∆ Q S 7. Shift in the S curve = ∆ S Q D MSB↓ Q D MSB↑ Marginal Analysis ( D ): if the marginal benefit of an action the marginal cost of the action ˃ do it = MSB

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MSC; if the marginal benefit of an action the marginal cost of the action ˃ ˂ do not do it = MSB MSC ˂ Allocative Efficiency : all MSB MSC; none MSB MSC; MSB = MSC ˃ ˂ Adam Smith (1776) “People looking out for only their self interests are nonetheless lead, as if by an invisible hand, to advance society’s interest. Consumer Surplus = difference b/w max P consumer is willing to pay (value=MSB) & P over Q ; (MSB – P ) ÷ Q Producer Surplus = difference b/w P & minimum P willing to produce (value=MSC) over Q ; ( P – MSC) ÷ Q...
View Full Document

## This note was uploaded on 01/16/2012 for the course ECO 2023 taught by Professor Rush during the Fall '08 term at University of Florida.

### Page1 / 2

Midterm 1 index card topics_3 - MSC; if the marginal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online