Download Chapter 11 - cloudfront.net

AP Microeconomics Unit 2
AP Week 3
November 22, 2016
 HW: Problem Set 1a and 1b
 HW: Read Chapter 3 page 48-50 (stop at Changes in Demand)
 EC: 2.1 Outline: I. Markets
ll. Demand
A. Demand Schedule
B. Law of Demand
C. Diminishing Marginal Utility
D. Income Effect
E. Substitution Effect
F. The Demand Curve
G. Market Demand
H. Determinants of demand
Week 4
November 28, 2016
 In Class Notes: Unit 2 Section 1
 HW: Problem Set: 1c
 HW: Read Chapter 3 page 50-53 (stop at supply)
 EC:2.2 Outline: I. Changes in Demand
A. Tastes
B. Number of Buyers
C. Income
D. Normal Goods
E. Prices of Related Goods
F. Substitute Good
G. Complementary Good
H. Consumer Expectations
I. Changes in Quantity Demanded
J. Change in Demand
November 29, 2016
 In Class Notes: Unit 2 Section 2
 CW: Demand Headlines
 HW: (none from problem set, but finish Demand headlines, if needed)
 HW: Read Chapter 3 page 53-57
 EC: 2.3 Outline: I. Supply
A. Supply Schedule
B. Law of Supply
C. Supply Curve
II. Market Supply
III. Determinants of Supply
IV. Changes in Supply
A. Resource Prices
B. Technology
C. Taxes and Subsidies
D. Prices of Other Goods
E. Producer Expectations
F. Number of Sellers
V. Changes in Quantity Supplied
A. Change in Supply
November 30, 2016
 In Class Notes: Unit 2 Section 3
 CW: Supply Headlines (finish as homework, if needed)
 HW: Problem Set 1d and 2a
 HW: Read: Chapter 3 page 58-60
 EC: Begin 2.4 Outline:
I. Market Equilibrium
A. Equilibrium Price
B. Equilibrium Quantity
C. Storage
II. Rationing Function of Prices
III. Efficient Allocation
A. Productive Efficiency
B. Allocative Efficiency
IV. Changes in Supply, Demand, and Equilibrium
A. Changes in Demand
B. Changes in Supply
C. Complex Cases
i. Supply Increase, Demand Decrease
ii. Supply Decrease, Demand Increase
iii. Supply Increase, Demand Increase
iv. Supply Decrease, Demand Decrease
December 1, 2016
 In Class Notes: Unit 2 Section 4
 CW: TCI 6.4 Notes (finish as homework, if needed. Skip 4 and 12)
 HW: Problem Set 2b
 HW: Read: Chapter 5 page 93-96 (consumer and producer surplus)
 EC: Continue 2.4 Outline:
I. Efficiently Functioning Markets
A. Consumer Surplus
i. Consumer Surplus
ii. Producer Surplus
December 2, 2016
 In Class Notes: ACTIVITY (cannot make up all of the points- this is part of your participation score)
 HW: Problem Set 3a, 4a, 4b
 HW: Read: Chapter 3 page 61-64 (finish chapter)
 EC: 2.5 Outline
I. Application: Government Set Prices
A. Price Ceilings on Gasoline
i. graphical analysis
ii. Rationing Problem
iii. Black Markets
B. Rent Controls
C. Price Floors on Wheat
i. Graphical Analysis
ii. Additional Consequences
Week 5
December 5, 2016
 In Class Notes: Unit 2 Section 5
 HW: Problem Set 3b and complete graphs 4 and 12 from TCI 6.4 Notes
 HW: Read Chapter 16 page 347-350 (stop at probable incidence of US Taxes)
 EC: 2.5 Outline (continued)
I Tax Incidence and Efficiency Loss
A. Elasticity and Tax Incidence
i. Division of Burden
ii. Elasticities
B. Efficiency Loss of a Tax
i. Tax Revenues
ii. Efficiency Loss
iii. Role of Elasticities
iv. Qualifications
a. Redistributive goals
b. Reducing Negative Externalities
December 6, 2016
 In Class Notes: Unit 2 Section 6
 HW: Problem Set 5a, 5b
 HW: Read page 76-89
 EC: 2.7 Outline
I. Price Elasticity of Demand
A. The Price-Elasticity Coefficient and Formula
i. Using Averages
ii. Using Percentages
iii. Elimination of Minus Sign
B. Interpretations of Ed
i. Elastic Demand
ii. Inelastic Demand
iii. Unit Elasticity
iv. Extreme Cases
C. The Total-Revenue Test
i. Elastic Demand
ii. Inelastic Demand
iii. Unit Elasticity
iv. Price Elasticity along a linear Demand Curve
D. Price Elasticity and the Total Revenue Curve
E. Determinants of Price Elasticity
i. Substitutability
ii. Proportion of Income
iii. Luxuries versus Necessities
iv. Time
F. Applications of Price Elasticity and Demand
i. Large Crop Yields
ii. Excise Tax
iii. Decriminalization of Illegal Drugs
II. Price Elasticity of Supply
A. Price Elasticity of Supply: The Market Period
B. Price Elasticity of Supply: The Short Run
C. Price Elasticity of Supply: The Long Run
D. Applications of Price Elasticity of Supply
i. Antiques and Reproduction
ii. Volatile Gold Prices
III. Cross Elasticity and Income Elasticity of Demand
A. Cross Elasticity of Demand
i. Substitute Goods
ii. Complementary Goods
iii. Independent Goods
iv. Application
B. Income Elasticity of Demand
i. Normal Goods
ii. Inferior Goods
iii. Insights
December 7, 2016
 In Class Notes: Unit 2 Section 7
 HW: Problem Set 6
 HW: Read chapter 6 page 117-125 (stop at prospect theory)
 EC: 2.8 Outline:
I. Law of Diminishing Utility
A. Terminology
B. Total Utility and Marginal Utility
C. Marginal Utility and Demand
II. Theory of Consumer Behavior
A. Consumer Choice and Budget Constraint
i. Rational Behavior
ii. Preferences
iii. Budget Constraint
iv. Prices
B. Utility Maximizing Rule
C. Numerical Example
i. Marginal Utility per Dollar
ii. Decision-Making Process
iii. Inferior Options
D. Algebraic Generalizations
III. Utility Maximization and the Demand Curve
A. Deriving the Demand Schedule and Curve
B. Income and Substitution Effects
IV. Applications and Extensions
A. IPods
B. The Diamond-Water Paradox
C. Opportunity Cost and the Value of Time
D. Medical Care Purchases
E. Cash and Noncash Gifts
December 8, 2016
 In Class Notes: Unit 2 Section 8
 HW: Submit Completed Problem Set
December 9, 2016
 In Class: Grade Problem Set
 HW: Turn in Extra Credit Outline to turnitin.com (optional)
 HW: PRINT Unit 2 Study Guide and bring it with you to class on Monday
Week 6
December 12, 2016
 In Class: Complete Problem Set Grading (if necessary)
 CW: Unit 2 Study Guide
 HW: Turn in Extra Credit Outline to turnitin.com (optional)
December 13, 2016
 In Class: Unit 2 Exam- FRQ Section
 HW: Print Exam Correction Form
December 14-16 (Day of Final Exam)
 In Class: Unit 2 Exam- Multiple Choice Section
 Exam Corrections
** Slight changes may be made once the Finals schedule is posted**