Long-Run Adjustments to Short-Run Conditions
Short-Run Profits: Moves In and Out of Equilibrium
FIGURE 9.6 Equilibrium for an Industry with U-shaped Cost Curves
The individual firm on the right is producing 2,000 units, and so we also know that the indus
The Aggregate Expenditures Model
Keynesian Aggregate Expenditure Model
Keynes developed this model during the
depression of the 1930s and it can help
explain how modern economies adjust to
economic shocks. This is used today to
provide insight r
Four Market Models
Perfect competition involves a very large number of firms producing a
standardized product (that is, a product identical to that of other producers, such
as corn or cucumbers). New firms can enter or exit th
Investment, Consumption, and
The Loanable Funds Market
The market for loanable funds is the aggregate of
all the individual financial markets.
Funds that Finance Investment
Funds come from three sources:
1. Household saving S
Business Cycles, Unemployment,
Inflation, and Growth
The business cycle is the upward and downward movements
of levels of GDP and refers to the period of expansions and
contractions in the level of economic activities around its longterm gr
Measuring National Output
and National Income
National Income Accounting
National income accounting is data collected and
published by the government describing the
various components of national income and
output in the economy.
The U.S. Department of
Monopoly and How It Arises
A monopoly is a market:
That produces a good or service for which no close
In which there is one supplier that is protected from
competition by a barrier preventing the entry of new
The Cost of Production
The Firm and Its Economic Problem
A firm is an institution that hires factors of
production and organizes them to produce and sell
goods and services.
The Firms Goal
A firms goal is to maximize profit.
If the firm fails to m
Price Elasticity of Demand
The responsiveness or sensitivity of consumer to
a price change is measured by a products Price
Elasticity of demand.
Demand for a product is sensitive with price
change of the product we call this product i
Demand and Supply
Markets and Prices
A market is any arrangement that enables
buyers and sellers to get information and do
business with each other.
There are markets for goods, servicers,
factor of production, inputs and others
A competitive mark
A graph has a point that is either a maximum or a minimum. To the left of the point,
the slope of relationship is positive. To the right of the point, the slope is negative. Is
the point a maximum point or a minimum point? Be sure to draw a figure that
Introduction to Economics: Scope,
Concepts and Principles
Cai Yun Chao (Omar)
International Islamic University Malaysia
One of the definition of Economics:
A social science that studies how
Topic 3 Elasticity
Rain spoils the strawberry crop, the price rises from $4 to $6 a box, and the quantity demanded
decreases from 1,000 to 600 boxes a week.
a. Calculate the price elasticity of demand over this price range.
Answer: The price e
1) The price elasticity of demand is defined as the magnitude of the
A) change in quantity demanded divided by the change in price.
B) change in price divided by the change in quantity demanded.
C) percentage change in quantity de
INTRODUCTORY OF ECONOMICS FOR ENGINNERING
Please be noted that:
This Mid-Term Exam consists of THREE main parts.
There are totally FOURTY TWO questions.
All the questions are COMPULSORY.
The duration of the exam is TWO
Section 1 &2
Matric No. _
Please select correct answer and fill in the answer sheet.
1) Economics is best defined as
A) how people make money and profits in the stock market.
B) making choices from an unlimited supply of goods and s
INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA
Economics and Management Sciences
Bachelor of Engineering
Name of Course
Introductory Economics For Engineering
Name (s) of Academic
Demand and Supply
Demand and supply
Elasticity of demand and supply
- Total quantity customers are willing
and able to purchase.
A demand function is a behavior function for
A supply function is a behavior
The Government and the Economy
Why does government provide some goods and
services such as the enforcement of law and
order, national defense, and providing good
schools and colleges?
Why dont we let private firms produce all
these items and leav