Outline of Lecture 1 – Basic Economics Concepts
... Remind students that total surplus is the area between the demand curve and the marginal cost curve. It should be clear that surplus is not realized for quantities of output between the monopoly output and the socially efficient output. ...
... Remind students that total surplus is the area between the demand curve and the marginal cost curve. It should be clear that surplus is not realized for quantities of output between the monopoly output and the socially efficient output. ...
Test 2 model answers
... One characteristic of monopolistic competition is low barriers to entry. If firms in the market (industry) are making an economic profit (more than their can earn in alternative pursuits) than other entrepreneurs will be attracted to the market and firms will enter. More firms in the market will inc ...
... One characteristic of monopolistic competition is low barriers to entry. If firms in the market (industry) are making an economic profit (more than their can earn in alternative pursuits) than other entrepreneurs will be attracted to the market and firms will enter. More firms in the market will inc ...
presentation source
... • Population - An increase in population means more buyers, an increasing demand, and a rightward shift in the demand curve; • Consumer Tastes and Advertising - As advertising leads to greater consumer preference for a product, a rightward shift in demand occurs; • Consumer Expectations of Future Pr ...
... • Population - An increase in population means more buyers, an increasing demand, and a rightward shift in the demand curve; • Consumer Tastes and Advertising - As advertising leads to greater consumer preference for a product, a rightward shift in demand occurs; • Consumer Expectations of Future Pr ...
Chapter 1
... reconstructing the demand schedule for an input, we must recognize that: The marginal physical products falls because of the law of diminishing returns as more workers are added. The price (and marginal revenue) received for the product sold also falls as more is produced and ...
... reconstructing the demand schedule for an input, we must recognize that: The marginal physical products falls because of the law of diminishing returns as more workers are added. The price (and marginal revenue) received for the product sold also falls as more is produced and ...
Answers to Self-Test Questions
... 43A Demand refers to the whole range of quantities that are demanded at various prices as depicted by a demand schedule or demand curve. The quantity demanded refers to a particular quantity at a particular price, i.e. it is a point on a demand curve. 44A Shortages cause competitive bidding among bu ...
... 43A Demand refers to the whole range of quantities that are demanded at various prices as depicted by a demand schedule or demand curve. The quantity demanded refers to a particular quantity at a particular price, i.e. it is a point on a demand curve. 44A Shortages cause competitive bidding among bu ...
market supply curve
... Here is a list of the variables that affect an individual consumer’s decision, using the pizza market as an example: • The price of the product (for example, the price of a pizza) • The consumer’s income • The price of substitute goods (for example, the prices of tacos or sandwiches or other goods t ...
... Here is a list of the variables that affect an individual consumer’s decision, using the pizza market as an example: • The price of the product (for example, the price of a pizza) • The consumer’s income • The price of substitute goods (for example, the prices of tacos or sandwiches or other goods t ...
Q d
... analyze the effects of any event on a market: First, determine whether the event shifts one or both curves. Second, determine the direction of the shifts. Third, compare the new equilibrium to the initial one. ...
... analyze the effects of any event on a market: First, determine whether the event shifts one or both curves. Second, determine the direction of the shifts. Third, compare the new equilibrium to the initial one. ...
Final Exam
... 18) Suppose the cost curves in the above figure apply to all firms in the industry. Then, if the initial price is P1, in the long run the market A) demand will increase. B) demand will decrease. C) supply will increase. D) supply will decrease. 19) Which of the following statements about a monopoly ...
... 18) Suppose the cost curves in the above figure apply to all firms in the industry. Then, if the initial price is P1, in the long run the market A) demand will increase. B) demand will decrease. C) supply will increase. D) supply will decrease. 19) Which of the following statements about a monopoly ...
After graduating from high school, Maria chose to go to college
... (D) The private sector would produce a larger than socially optimal quantity. (E) Private-sector producers would realize too great a profit. ...
... (D) The private sector would produce a larger than socially optimal quantity. (E) Private-sector producers would realize too great a profit. ...
Elasticity of Supply
... Supply curve shows data from supply schedule in graph form Market supply curve shows data from market supply schedule ...
... Supply curve shows data from supply schedule in graph form Market supply curve shows data from market supply schedule ...
B. The Supply
... - The Supply (S) is the entire relationship between all possible prices and the quantities that producers plan to supply at every possible price. - The Supply is represented by the Supply curve. - If the Supply increases the Supply curve shifts to the right. - If the Supply decreases, the Supply cur ...
... - The Supply (S) is the entire relationship between all possible prices and the quantities that producers plan to supply at every possible price. - The Supply is represented by the Supply curve. - If the Supply increases the Supply curve shifts to the right. - If the Supply decreases, the Supply cur ...
Chapter 23
... of greater profit leads to the worst combined outcome • Eventually low outcomes make firms return to higher prices ...
... of greater profit leads to the worst combined outcome • Eventually low outcomes make firms return to higher prices ...
Economic equilibrium
In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes and the quantity is called ""competitive quantity"" or market clearing quantity.