Econ Notes Test 2
Detriments of Demand
Four factors determine an individuals demand for a product
Utility Theory and Individual Choice
According to traditional economists, our behavior is motivated by rationa
The role of government
1. What does a society want produced?
A. In market based system, buyers and sellers make these decisions
B. In state-run system, those in power (govt) make these decisions
i. Market mechanism produces goods and s
Economics 2000 Section 14
Introduction to Microeconomics
Office: 2300C BEC
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Economics develops methods for the systematic assessment and comparison of
LOUISIANA STATE UNIVERSITY
Economics 2000 Fall 2014 Syllabus
Office Tel. 767-3362
Required Texts and Software:
1. The Micro Economy Today, 13th edition, by Schiller, H
1. Consumer choice
1. prices are important in determining consumer behavior
1.1. New Products have to be priced correctly
1.2. In this chapter: look at how price affects consumer decisions
How do we decide how much any good to buy?
1. Comparative Advantage
Colleen can collect 10 bushels of food in 1 day while Bill can only collect 4 bushels.
Colleen can cut 10 logs in 1 day while Bill can only cut 8.
Colleen has Absolute Advantage in both the activities.
(Related to Chapter 4)
Benefit from chocolate bars
Get a piece of paper and write down
your value of the chocolate bars.
value here means you quantify in
dollars the happiness (utility) you get
For this assignment, you will research, analyze, and explain an issue to other LSU
students. The issue will be one of your choosing, although under Topic Selection I offer
some reasonably firm criteria for what is an acceptable topic. Altho
Supply and Demand
1. How supply and demand works?
2. What determines the price of a good/service?
3. How does price affect production and consumption?
4. Why do prices and production levels change?
II. Market Participants-trying to maximize retu
Chapter 8: The Competitive Firm
Competition and Profits
All firms tries to make a profit.
Their profit opportunities are limited by the amount of competition they face
In this chapter, we examine
How firms make price and production decisions.
Supply, Demand, and
Before we start.
What do we mean by policy affects
the market outcome?
It means the policys impact on the
price and quantity of the good and
therefore on the markets allocation of
- Demand - the willingness and ability of buyers to purchase different quantities of
a good during a specific time
- Ceteris paribus an assumption used to examine the effect of one influence on
an outcome while holding all other influences const