Profit= total profit minus the cost put into it
Explicit costs: outlay of money such as paying wages, raw material, etc
Implicit costs: opportunity cost of owners time
Accounting profit: total revenue minus total explicit costs (excludes implic
Supply, Demand, and
The True Cost of Massive
have been trying to set maximum or
minimum prices since ancient times.
The Old Testament prohibited interest on loans to fellow
When the market fails to allocate resources efficiently !
Failure A situation in which a market left
on its own fails to allocate resources efficiently
The uncompensated impact of one
persons actions on t
how much of each good is produced
which producers produce it
which consumers consume it
Why do we allocate
Welfare economics studies how
the allocation of resources affects
Chapter 14: Firms in
Characteristics of Perfect
the difference between average revenue and
marginal revenue. Why are both of these revenue measures
important to a profit-maximizing firm?
a graph to demonstrate the circumstances that would
prevail in a competi
Chapter 13: The Costs
You run Ford Motor Company.
List three different costs you have.
that are affected
by your costs.
In this chapter,
look for the answers to these questions:
Chapter 16: Monopolistic
Between Monopoly and Competition
Perfect competition: many firms, identical
Monopoly: one firm
In between these extremes: imperfect
Oligopoly: only a few sellers offer
Chapter 4: Supply and
What factors affect buyers demand for
What factors affect sellers supply of
How do supply and demand determine the
price of a good and the quantity sold?
How do changes in the factors that affect
Unit 1: Unit 1(1st week):What is macroeconomics? - Lecture #1
1. Definition of Economics
2. Macroeconomics and Microeconomics
3. Opportunity cost
4. Production Possibility Curve(PPC)
a. constant opportunity cost
b. increasing opportunity cost
Unit 2: Unit 2(2nd week):supply and demand - Lecture #2
1. Circular Flow Model
2. Demand : a) definition b) law of demand c) non-price factor's change d) change in
demand and change in quanity demanded
3. Supply : a) definition b) law of supply c) non-pri
1) Explain the difference among the frictional, the structural, and the cyclical forms
Over time, the economy experiences many ups and downs. That's what we
call cyclical unemployment because it goes in cycles. Cyclical unemp
Demand and Supply Exercises:
1. If consumers expect the price of some good to rise next week, then we generally observe
the price of the good rising this week. Explain this fact using a graph.
2. The drought in the plain states has made grain, and therefo