Q: What is strange about the Marshallian Demand curve?
The independent variable is on the vertical axis, while the dependent variable is on the horizontal axis.
rewrite the linear demand equation:
Qd = a - bP
Lecture 13 Market Failure and Government Action
How does government supply regulation?
Government appoints the senior bureaucrats who are the key decision makers.
Lecture 12 Imperfect Competition
Monopolistic Competition is a market structure where
many firms compete through product differentiation making similar but
slightly different products
firms have some monopoly (pric
Chapter 4 Elasticity
Consideration of elasticity
Elasticity provides a universal measure that is immune to inflation and is comparable across national borders and across
Elasticity = % (dep
Chapter 4 - Price Elasticity of Demand:
Elasticity is a measure of the responsiveness of the QD of a good to change in its price, other
things remaining the same
Price elasticity of demand = % change in the QD/
The Theory of Competitive Supply
Many small firms
Entry into the industry is easy
All firms view the market price as being something over which they have no co
Firms are social institutions responsible for organizing the production of most commodities supplied to the
Firms: 1) Organize Production (technology and factor input decisions)
Chapter 6 A Housing Market With a Rent Ceiling:
A rent ceiling that is set above the equilibrium rent has no effect
A rent ceiling that is set below the equilibrium rent creates a housing shortage, increased search
The Cost of Production
Short Run: at least one fixed input; other inputs variable (capital stock is fixed)
Long Run: all inputs are variable (firm can alter its capital stock over the long-run by altering
What is Economics?
It is a social science concerned with understanding the forces that shape social values and social behaviour.
The objective is to be able to identify how changing one thing (independ
Lecture 11 - Monopoly
A Monopoly is an industry with one supplier of a product with no close substitutes.
Monopolies occur whenever there are barriers to entry
Legal Monopolies (public franchise, government license, p
Chapter 6 Market Values and Government Intervention
Governments intervene to alter market prices because:
1. Unfairness of market prices
2. Belief that the market may have failed to provide efficient prices (market failu
What is wrong with this statement: Demand refers to the willingness of
buyers to purchase different quantities of a good at different prices during a
specific time period?
True or false? As the price of oranges rises, the demand for oranges fall