ECON 2005 Week 2

# ECON 2005 Week 2 - ECON 2005: Principles of Economics...

This preview shows pages 1–16. Sign up to view the full content.

ECON 2005: Principles of Economics (Microeconomics) Week 2 1

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

View Full Document
Graphing u Slope calculation u Steepness of a Line u If one line has a slope of 5 and another a slope of 2, which line is steeper? u Equation of a Line 2
Positive and Negative Slopes 3

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

View Full Document
Alternate Slopes for Straight Lines 4 No relation: zero slope 0 x 20 10 10 20 y Slope = 0/10 = 0 No relation: infinite slope 0 x 10 10 20 y 10 Slope = 10/0 = 10
Slope Varies Along a Curve 5 The slope of a curved line varies from point to point At point a , the slope of the curve is equal to the slope of the tangent A At point b , the slope of the curve is equal to the slope of the tangent B 0 40 30 20 10 x 30 20 10 40 y a b B A

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

View Full Document
Slope Varies Along a Curve 6
Chapter 2 Economic Tools and Economic Systems 7

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

View Full Document
Absolute Advantage u A producer of a good or service has absolute advantage over another producer when it is able to produce that good or service using fewer resources than the other producer requires. 8
Absolute Advantage u In the presence of two producers… 1. Produces greater output in a given amount of time, or 2. Produces faster (requires less time) given a set level of output 9

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

View Full Document
Determining Absolute Advantage 10 pick berries (qt.) ears of corn (ea.) You 3 10 Roommate 6 15 Per ½ Hour pick berries (qt.) ears of corn (ea.) You 10 minutes 3 minutes Roommate 5 minutes 2 minutes Per Each
Law of Comparative Advantage u The Law of Comparative Advantage states that the producer with the lowest opportunity cost should produce that product. 11

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

View Full Document
Law of Comparative Advantage u You and your roommate enjoy corn and berries, but only have 30 minutes each week to pick these crops u Assume you each only eat 5 ears of corn each week u You both want to maximize your 12
pick berries (qt.) ears of corn (ea.) You Roommate Per ½ Hour Determining Absolute Advantage u Calculate opportunity cost for each activity… 13 pick berries (qt.) ears of corn (ea.) You 3 10 Roommate 6 15 Per ½ Hour

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

View Full Document

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.

## This note was uploaded on 04/08/2012 for the course ECON 2005 at Virginia Tech.

### Page1 / 53

ECON 2005 Week 2 - ECON 2005: Principles of Economics...

This preview shows document pages 1 - 16. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online