Word
... stronger response by consumers than if there were no substitute. For example, if the price of a good goes up, the change in quantity demanded will be greater if there is a close substitute to which consumers can switch than if there is no such substitute. Therefore, we would expect the own price ela ...
... stronger response by consumers than if there were no substitute. For example, if the price of a good goes up, the change in quantity demanded will be greater if there is a close substitute to which consumers can switch than if there is no such substitute. Therefore, we would expect the own price ela ...
ch_04
... The supply curve is the graphic representation of the law of supply. The supply curve slopes upward to the right. The slope tells us that the quantity supplied varies directly – in the same direction – with the price. ...
... The supply curve is the graphic representation of the law of supply. The supply curve slopes upward to the right. The slope tells us that the quantity supplied varies directly – in the same direction – with the price. ...
The Labor Market
... The Labor Market Labor Supply: (labor is supplied by workers) In economics, we assume everybody wants to make as much as possible from their jobs. This assumption is called income maximization. This assumption is arrived at because the economist assumes everyone is rational. Does everyone want to ma ...
... The Labor Market Labor Supply: (labor is supplied by workers) In economics, we assume everybody wants to make as much as possible from their jobs. This assumption is called income maximization. This assumption is arrived at because the economist assumes everyone is rational. Does everyone want to ma ...
demand in product/output markets
... 2. Quantity demanded and quantity supplied are always per time period—that is, per day, per month, or per year. 3. The demand for a good is determined by price, household income and wealth, prices of other goods and services, tastes and preferences, and expectations. 4. The supply of a good is deter ...
... 2. Quantity demanded and quantity supplied are always per time period—that is, per day, per month, or per year. 3. The demand for a good is determined by price, household income and wealth, prices of other goods and services, tastes and preferences, and expectations. 4. The supply of a good is deter ...
Practice Problems
... (B)They produce at an output level where marginal cost > price (C)They produce more output than does a competitive industry (D)They produce too much and therefore resources are overallocated in that market (E)They produce at an output level where marginal cost < marginal revenue How is a monopoly di ...
... (B)They produce at an output level where marginal cost > price (C)They produce more output than does a competitive industry (D)They produce too much and therefore resources are overallocated in that market (E)They produce at an output level where marginal cost < marginal revenue How is a monopoly di ...
2011 Winter Midterm Solutions
... The total surplus at Q1 exceeds the total surplus at Q2 by the amount C+E, the deadweight loss Better Answer At Q2, the marginal value of each extra production (over Q2 but up to Q1) is higher than MC of production but those quantities are not produced and transacted in the market, leading to DWL. 4 ...
... The total surplus at Q1 exceeds the total surplus at Q2 by the amount C+E, the deadweight loss Better Answer At Q2, the marginal value of each extra production (over Q2 but up to Q1) is higher than MC of production but those quantities are not produced and transacted in the market, leading to DWL. 4 ...
Supply and Demand
... and ____________________ are located. The geographic area we choose depends on the specific question we are trying to answer. 3. In ____________________ markets, individual buyers and sellers have some influence over the price of the product. 4. In ____________________ markets, each buyer and seller ...
... and ____________________ are located. The geographic area we choose depends on the specific question we are trying to answer. 3. In ____________________ markets, individual buyers and sellers have some influence over the price of the product. 4. In ____________________ markets, each buyer and seller ...
Lecture Notes Chapter 3
... What makes some markets imperfectly competitive and others perfectly competitive? Perfectly competitive markets have many small buyers or sellers Each is a small part of the market, and the product is ...
... What makes some markets imperfectly competitive and others perfectly competitive? Perfectly competitive markets have many small buyers or sellers Each is a small part of the market, and the product is ...
Word Pro - equilibrium and shocks.lwp
... money supply increases unexpectedly from M s to Ms'. This shifts the AD curve out and to the right. Since the change in the money supply is unexpected, we assume that increase in the price level to P' is also unexpected. This unexpected increase in prices is interpreted by producers as an increase i ...
... money supply increases unexpectedly from M s to Ms'. This shifts the AD curve out and to the right. Since the change in the money supply is unexpected, we assume that increase in the price level to P' is also unexpected. This unexpected increase in prices is interpreted by producers as an increase i ...
ECMC02 – Week 10
... Consider a simple economy with two goods food and clothing - and two consumers (Bert and Ernie). There is an initial endowment in this simple “exchange” economy, and the initial price ratio is price of food/price of clothing = 3/1. At this initial price ratio, Bert wants to buy 6 units of clothing ...
... Consider a simple economy with two goods food and clothing - and two consumers (Bert and Ernie). There is an initial endowment in this simple “exchange” economy, and the initial price ratio is price of food/price of clothing = 3/1. At this initial price ratio, Bert wants to buy 6 units of clothing ...
ECON 202 - Baton Rouge Community College
... Grading: The College grading policy should be included in the course syllabus. Any special practices should also go here. This should include the instructor’s and/or the department’s policy for make-up work. For example in a speech course, “Speeches not given on due date will receive no grade higher ...
... Grading: The College grading policy should be included in the course syllabus. Any special practices should also go here. This should include the instructor’s and/or the department’s policy for make-up work. For example in a speech course, “Speeches not given on due date will receive no grade higher ...
Price Elasticity of Demand
... with continuing bus service to Montreal, Quebec. The following two individuals are considering ways to increase the revenues generated from Vermonter ticket sales. P ...
... with continuing bus service to Montreal, Quebec. The following two individuals are considering ways to increase the revenues generated from Vermonter ticket sales. P ...
Chapter 4 Section 3 Elasticity of Demand
... Elasticity is greater than 1, so demand is elastic. In this example, a small decrease in price caused a large increase in the quantity demanded. ...
... Elasticity is greater than 1, so demand is elastic. In this example, a small decrease in price caused a large increase in the quantity demanded. ...
chapter 16 - comparative advantage
... c. When trade opens, the world price will have to settle somewhere between $4 per unit and $7 per unit. At prices above $4 per unit, Country A has an excess domestic supply. At prices below $7 per unit, Country B has an excess domestic demand. Therefore, we can conclude that Country A will export go ...
... c. When trade opens, the world price will have to settle somewhere between $4 per unit and $7 per unit. At prices above $4 per unit, Country A has an excess domestic supply. At prices below $7 per unit, Country B has an excess domestic demand. Therefore, we can conclude that Country A will export go ...
Supply and demand
In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.The four basic laws of supply and demand are: If demand increases (demand curve shifts to the right) and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases (demand curve shifts to the left) and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply increases (supply curve shifts to the right), a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply decreases (supply curve shifts to the left), a shortage occurs, leading to a higher equilibrium price.↑