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Lecture 08 W12 post

Lecture 08 W12 post - Wednesday February 1 st • Draft of...

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Unformatted text preview: Wednesday, February 1 st • Draft of essay #1 due in labs this week • Evaluation of draft of essay 1 Due Feb. 9 th and 10 th in Lab. • Midterm #1: February 13-16 in the Testing Center • Monday and Tuesday: No late fee • Wednesday: $5 late fee • Thursday: $7 late fee and test must be in hand by 11 am Markets and Liberty - II 1 MARKETS AND LIBERTY – II Markets and Liberty - II 2 Outline (2 lectures) • The “magic” of markets • Gains from exchange (trade) • Money • Specialization • Competition • How markets work • Demand, supply, and price adjustment • The role of profits • The roles of government in a market economy • Government restriction of exchange Markets and Liberty - II 3 How do markets work? The price system : • Prices adjust to changes in demand and supply. • This tends to produce goods that people want at prices that reflect efficient production. 4 Markets and Liberty - II iClicker question After John’s failure with his lovely wood sculptures of vultures, what did he try next? A. Tables B. Entertainment centers C. Chairs D. Busts of Adam Smith Markets and Liberty - II 5 Four Key Factors in Market Economies • Law of Demand • As the price rises, the quantity demanded declines, all else fixed. • Law of Supply • As the price rises, the quantity supplied increases, all else fixed. • Equilibrium Price • Profits Markets and Liberty - II 6 Law of Demand Markets and Liberty - II 7 Units Price $1 $3 $2 $4 $5 $6 $7 $8 10 20 40 30 50 60 70 80 90 As the price of a good or service rises, individuals will buy less (inverse relationship) D Four Key Factors in Market Economies • Law of Demand • As the price rises, the quantity demanded declines, all...
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Lecture 08 W12 post - Wednesday February 1 st • Draft of...

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