Economics: How to allocate scarce resources amongst different activities
Equity: distributing across members equally
Efficiency: producing the maximum you can out of the scarce resources
Efficiency translates into no wastage.
SIZE OF THE PI
1. Equilibrium and the Adjustment Process
2. A Free Market Maximizes Producer Plus Consumer Surplus (the Gains from Trade)
3.Does the Model Work? Evidence from the Laboratory
4. Shifting Demand and Supply Curves
5. Terminology: Demand Compared with Quanti
Chapter 2: The Power of Trade and Comparative Advantage
1. Trade and Preferences:
2. How does trade influence a persons preference?
3. People with different preferences can trade to gain something of value to them while trading
2 March 2017
Ch 3: Supply and Demand
1. The Demand Curve for Oil:
2. The demand curve is a model, so what does it show us?
3. The demand curve can be read to see the quantity demanded at a price, or the maximum
9 May 2017
The Market for Medical Care
Jimmy Kimmel, host of an American talk show, Jimmy Kimmel Live, recently gave a
heart-aching monologue about his newborn son. In Kimmels monologue, he explains that after
Principles of Microeconomics Fall 2017
Key Ideas of Economics (Default)
The next four questions pertain to the situation described below.
1) Lisa is choosing between three alternatives: a) talking to her grandmother which she values at
Interdependencies and Gains from Trade
Trade products everyday
Technology (China), clothing (Taiwan), cars (Japan), etc.
When is trade beneficial, and at what price should it happen?
Bob makes patties and Max makes buns
Trade to increase var
Chapter 11: Public Goods and Common Resources
People consume a lot of goods (so the value it) but dont pay for it
A type of market failure
People who value these goods but no price attached to them
Chapter 5: Elasticity
Costs are going up so thinking of raising price to $250/website
If you increase prices, quantity demanded will decrease
Question you ask if I increase this price, what will happen to my
One of the largest changes in the economy over the past several decades is that technological
advances have reduced the cost of making computers.
a. Draw a supply-and-demand diagram to show what happened to price, quantity, consumer
surplus, and producer
Scientists (Nobel Prize for Economic Sciences)
Hypothesize (with models) about some economic phenomenon based on
Test the models with data
MAKE POSITIVE STATEMENTS
They may or may not be true
Based off so
Scarcity: A society has limited resources and cannot produce all goods and services that they
Economics: The study of how to manage the scarce resources and allocate them across
=The management of these scarce resourc
Chapter 7: Consumers, Producers, and the Efficiency of Markets
How much is produced?
Who produces it?
Who consumes it?
Willingness to pay
Maximum amount a buyers is willing to pay for a good
Chapter 13: Costs of Production
Firm have inputs output sell in the market
Input = land, labor, capital
Firms objective: maximize profits
Profit = total revenue - total cost
Profit = P x Q - total cost
Explicit costs: costs for which an actual out
Chapter 4: Market Forces of Demand and Supply
A group of buyers and sellers for a particular good
Always for a particular good
Group of buyers and sellers
Many buyers and many sellers for the same exact product
No single buy
Chapter 8: Costs of Taxation
Government revenue = tax x Qt
Qt = New quantity after tax
Area of rectangle created by Pb, Ps, and Qt
Government wants to raise revenue
Society = Buyers + Sellers +
Chapter 6: Supply, Demand, Government Policies
Legal maximum price
Ex. rent control
Can cause issues like a shortage
Now discrimination can occur based on race, gender, religion, etc.
Artificially setting this price ceiling causes disc