This document provides an overview and review of key concepts from Economics 160 Microeconomic Principles for both the online and live classes. It includes administrative notes about upcoming exams and articles. It then reviews concepts like production possibilities frontiers, comparative advantage, opportunity costs, gains from specialization and trade. It provides examples comparing situations with narrow and wide differences in opportunity costs. Finally, it discusses supply and demand equilibrium, price signals, the effects of a crop failure in Africa, the consequences of violating a do-nothing policy, and CSUN's enrollment policy.
The document discusses the law of supply, which states that the quantity supplied of a good rises as the price rises and falls as the price falls, assuming other factors remain constant. It provides a supply schedule and graph to illustrate this relationship. The document then notes some exceptions to the law of supply, such as auction sales, when sellers prioritize selling goods quickly due to financial need. It also discusses exceptions related to sellers' price expectations, stock clearances, fears of goods becoming outdated, and perishable goods that must be sold before expiring.
Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph.
Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. ... Supply represents how much the market can offer.
This document provides an overview of key concepts in microeconomics including markets, supply and demand, equilibrium, consumer and producer surplus, and the effects of changes in supply and demand. It defines markets, demand, the law of demand, supply, the law of supply, and equilibrium. It also discusses consumer surplus, producer surplus, surpluses and shortages, and the effects of price ceilings and floors.
The document discusses price ceilings and price floors. It explains that while markets typically determine prices, governments may intervene by setting maximum (price ceilings) or minimum (price floors) prices in rare cases where equilibrium prices are unacceptable. Price ceilings can cause chronic excess demand by limiting prices below equilibrium, as seen during WWII. Price floors can cause chronic excess supply by propping up prices above equilibrium, as with agricultural policies in the 1930s seeking price parity with non-farm goods.
The document discusses different types of supply:
1. Joint supply refers to the supply of two or more goods that are produced together, like beef and bone or milk and cream.
2. Compound supply is when a single product is obtained from different resources, like petrol from various oil companies or milk from cows, goats, and buffaloes.
3. Market period supply refers to a short time frame of 2-3 hours where supply cannot change rapidly. It is classified into perishable goods, whose supply is inelastic, and durable goods, whose supply increases limitedly with price.
1) Supply is how much a firm is willing and able to sell at every given price if all else remains the same. The law of supply states that the quantity supplied of a good rises as the price rises.
2) A supply schedule shows the relationship between price and quantity supplied, while a supply curve graphs this relationship. The market supply curve shows the total quantity supplied by all firms in the market.
3) A change in supply refers to a shift of the supply curve, while a change in quantity supplied refers to movement along the existing supply curve. Determinants that can cause supply to change include input prices, technology, the number of sellers, and taxes.
The document defines supply as the quantity of a commodity offered for sale at a given price during a period. It lists the key determinants of supply as price of the commodity, related goods, production costs, technology, government policy, number of producers, and price expectations. The document explains that a supply schedule is a table showing the quantity supplied at different prices by individual firms and in aggregate by the market over a period. It provides an example of an individual firm and market supply schedule.
The document discusses the law of supply, which states that the quantity supplied of a good rises as the price rises and falls as the price falls, assuming other factors remain constant. It provides a supply schedule and graph to illustrate this relationship. The document then notes some exceptions to the law of supply, such as auction sales, when sellers prioritize selling goods quickly due to financial need. It also discusses exceptions related to sellers' price expectations, stock clearances, fears of goods becoming outdated, and perishable goods that must be sold before expiring.
Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph.
Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. ... Supply represents how much the market can offer.
This document provides an overview of key concepts in microeconomics including markets, supply and demand, equilibrium, consumer and producer surplus, and the effects of changes in supply and demand. It defines markets, demand, the law of demand, supply, the law of supply, and equilibrium. It also discusses consumer surplus, producer surplus, surpluses and shortages, and the effects of price ceilings and floors.
The document discusses price ceilings and price floors. It explains that while markets typically determine prices, governments may intervene by setting maximum (price ceilings) or minimum (price floors) prices in rare cases where equilibrium prices are unacceptable. Price ceilings can cause chronic excess demand by limiting prices below equilibrium, as seen during WWII. Price floors can cause chronic excess supply by propping up prices above equilibrium, as with agricultural policies in the 1930s seeking price parity with non-farm goods.
The document discusses different types of supply:
1. Joint supply refers to the supply of two or more goods that are produced together, like beef and bone or milk and cream.
2. Compound supply is when a single product is obtained from different resources, like petrol from various oil companies or milk from cows, goats, and buffaloes.
3. Market period supply refers to a short time frame of 2-3 hours where supply cannot change rapidly. It is classified into perishable goods, whose supply is inelastic, and durable goods, whose supply increases limitedly with price.
1) Supply is how much a firm is willing and able to sell at every given price if all else remains the same. The law of supply states that the quantity supplied of a good rises as the price rises.
2) A supply schedule shows the relationship between price and quantity supplied, while a supply curve graphs this relationship. The market supply curve shows the total quantity supplied by all firms in the market.
3) A change in supply refers to a shift of the supply curve, while a change in quantity supplied refers to movement along the existing supply curve. Determinants that can cause supply to change include input prices, technology, the number of sellers, and taxes.
The document defines supply as the quantity of a commodity offered for sale at a given price during a period. It lists the key determinants of supply as price of the commodity, related goods, production costs, technology, government policy, number of producers, and price expectations. The document explains that a supply schedule is a table showing the quantity supplied at different prices by individual firms and in aggregate by the market over a period. It provides an example of an individual firm and market supply schedule.
The document discusses supply and the law of supply. It defines supply as the willingness and ability of sellers to produce and offer different quantities of a good at different prices. The law of supply states that quantity supplied increases as price increases, and decreases as price decreases, resulting in a direct relationship between price and quantity supplied. Supply can be illustrated using supply schedules and supply curves, with the curve shifting right when supply increases and left when supply decreases. Factors that cause supply curves to shift include resource prices, technology, taxes, subsidies, quotas, number of sellers, expectations, and weather.
The document discusses the economic concept of supply. It defines supply as the quantity of a good or service that producers are willing and able to sell at a given price over a specific period of time. The document outlines several key determinants of supply, including the price of the good, prices of related goods and factors of production, producers' objectives, and external factors. It then presents the supply function and law of supply, which states that suppliers will provide a greater quantity at a higher price, all else being equal. The document concludes by explaining demand-supply equilibrium and how excess supply or demand can create inefficiencies in the market.
The document discusses market supply and its key characteristics. It defines supply as the quantities of a good or service that sellers are willing and able to offer for sale at various prices within a given time period, with other factors held constant. Supply is determined by price and time, and comes out of a company's stock or inventory. The main determinants of supply include price, costs of production, technology, taxes/subsidies, and prices of related goods. The law of supply states that, all else equal, supply and price move directly - higher prices lead to increased supply. Market equilibrium exists when supply equals demand.
This document discusses the concept of supply, including the difference between supply and stock, the determinants of supply, and the law of supply. It defines supply as the various quantities of a commodity that producers will offer for sale at a given time at corresponding prices. The key determinants of supply are the price of the commodity, prices of related goods, prices of factors of production, technical knowledge, and producers' goals. The law of supply states that, all else equal, as the price of a commodity increases, the quantity supplied will also increase, and vice versa.
This document provides an overview of market equilibrium and how it is impacted by shifts in supply and demand. It defines key economic concepts such as markets, demand and supply curves, equilibrium price and quantity, surplus and shortage. It then explains how equilibrium is impacted by changes in demand and supply, both independently and simultaneously. Special cases involving perfectly inelastic or elastic demand and supply are covered. The document also discusses consumer surplus, producer surplus, total surplus, and how government intervention through price controls can impact equilibrium and result in deadweight loss. Market failures from externalities and ways to internalize externalities are explained.
This document defines supply as the quantity of goods and services producers are willing and able to provide at various prices over a given period. It distinguishes between stock, which is existing output, and supply, which is output brought to market. The supply schedule shows the different quantities supplied at different prices, while the supply curve graphs this relationship. Determinants that shift the supply curve include improvements in technology, production costs, the number of sellers, taxes and subsidies, and weather conditions.
The document discusses market equilibrium and how supply and demand interact to determine price and quantity in competitive markets. It defines equilibrium price as the price where the quantity demanded is equal to the quantity supplied, resulting in no shortages or surpluses. Disequilibrium occurs when demand and supply are not equal at the existing price, resulting in either a shortage or surplus. The document provides examples of how prices and quantities adjust to changes in demand or supply through shifts in the curves to restore equilibrium. Tasks are included applying these concepts to real world market situations.
The document summarizes the law of supply and key concepts related to supply curves. It states that according to the law of supply, the quantity supplied of a good rises with price and falls with price, assuming other factors remain unchanged. It then discusses individual and market supply schedules and curves, explaining that supply curves slope upward due to factors like costs rising with quantity and higher prices incentivizing increased production. The document notes exceptions to the law of supply and defines movements along the supply curve versus shifts of the entire curve.
The document discusses the concept of supply in economics. It defines supply as the quantity of a commodity producers are willing and able to sell at a given price over a specific time period. The supply of a product is determined by several factors including its price, production costs, technology, government policies, and more. The supply schedule shows the relationship between price and quantity supplied, while the supply curve illustrates this graphically as an upward-sloping curve. Market equilibrium occurs at the price where quantity supplied equals quantity demanded. A change in the supply curve results from changes in its determinants and causes the equilibrium price and quantity to also change.
This document covers key concepts in microeconomics including supply and demand, market structures, price controls, and normal versus inferior goods. It provides definitions and examples of demand, supply, price ceilings, price floors, buffer stocks, and different market models. Situations that cause supply to shift left and the effects of a drought on the corn market over time are also examined using supply and demand diagrams.
The price of vanilla bounced dramatically between 2000 and 2006 due to changes in demand and supply. In 2000, vanilla beans sold for $50 per kilogram but rose to $500 per kilogram in 2003 after a cyclone devastated Madagascar's vanilla crop. By 2006, the price fell again to $25 per kilogram as supplies recovered. Fluctuations in weather and production caused shifts in the supply of vanilla that, combined with demand, resulted in large price swings.
This document provides an overview of key topics in consumer equilibrium and market demand, including:
1. Conditions for consumer equilibrium occur where the marginal utility derived from the last dollar spent on each good is identical.
2. Changes in equilibrium can result from changes in product price or other demand determinants like income.
3. Consumer surplus represents the economic benefit consumers receive when they pay less for a product than they are willing to pay.
This document provides an overview of key topics in consumer equilibrium and market demand, including:
1. Conditions for consumer equilibrium occur where the marginal utility derived from the last dollar spent on each good is identical.
2. Changes in equilibrium can result from changes in product price or other demand determinants like income.
3. Consumer surplus represents the economic benefit consumers receive when they pay less for a product than they are willing to pay.
This document is an instructor's manual for microeconomics. It provides teaching notes, review questions, and exercises for each chapter in the textbook. The manual summarizes the key concepts in each chapter and provides guidance to instructors on effectively teaching the material. The chapter discussed here is on the basics of supply and demand. It reviews the fundamental supply and demand model and how it can be applied to important real-world markets. The manual suggests ways to clarify common student misunderstandings and effectively engage students with the quantitative and applied aspects of supply and demand analysis.
The document defines demand and discusses the key concepts of demand including:
- The difference between needs, wants, and demand
- How demand is represented by demand schedules, demand curves, and demand functions
- The law of demand and how quantity demanded responds inversely to price changes
- Factors that influence demand such as income, population, and tastes
- How elasticity of demand measures the responsiveness of quantity demanded to price and income changes
This document discusses demand analysis and the law of demand. It begins by defining demand and explaining that demand can shift due to various factors that increase or decrease demand for specific products. It then explains the law of demand, which states that quantity demanded varies inversely with price when all other factors are held constant. The document provides a demand schedule and demand curve for Nestle Maggi to illustrate these concepts. It discusses movements along the demand curve due to price changes versus shifts of the demand curve due to non-price factors. Finally, it covers exceptions to the law of demand and factors that can cause the demand curve to slope upward.
The document provides an overview of key concepts in supply and demand including:
- Supply and demand determine equilibrium price and quantity in a competitive market
- The demand curve slopes downward as quantity demanded increases with lower price
- Supply curve slopes upward as quantity supplied increases with higher price
- Equilibrium is reached at the price where quantity supplied equals quantity demanded
- Shifts in supply or demand curves change the equilibrium price and quantity in predictable ways
This document provides an overview of an introductory economics course. It includes 6 study units covering topics like markets, productivity, and international trade. Students will be assessed through tests, assignments, and an examination. The first study unit defines economics as studying how humans make choices in the face of scarcity. It explains that supply and demand determine what goods and services are produced and in what quantities through the interaction of buyers and sellers in a market. The document also outlines factors that shift supply and demand curves, like changes in price, income, and preferences.
The document discusses supply and demand. It defines demand in economics as wanting and being able to purchase a good, rather than just desiring it. Demand refers to willingness and ability to purchase at a given price. The document also discusses factors that affect supply such as price, costs of production, and market supply from multiple sellers. It analyzes factors that influence demand such as price, population, tastes, prices of substitutes and complements, income distribution, expectations, advertising, and taxation policy. It introduces the laws of demand and supply - as price increases, quantity demanded decreases and as price decreases, quantity demanded increases. The law of supply states the opposite - as price rises, quantity supplied rises.
The document discusses supply and the law of supply. It defines supply as the willingness and ability of sellers to produce and offer different quantities of a good at different prices. The law of supply states that quantity supplied increases as price increases, and decreases as price decreases, resulting in a direct relationship between price and quantity supplied. Supply can be illustrated using supply schedules and supply curves, with the curve shifting right when supply increases and left when supply decreases. Factors that cause supply curves to shift include resource prices, technology, taxes, subsidies, quotas, number of sellers, expectations, and weather.
The document discusses the economic concept of supply. It defines supply as the quantity of a good or service that producers are willing and able to sell at a given price over a specific period of time. The document outlines several key determinants of supply, including the price of the good, prices of related goods and factors of production, producers' objectives, and external factors. It then presents the supply function and law of supply, which states that suppliers will provide a greater quantity at a higher price, all else being equal. The document concludes by explaining demand-supply equilibrium and how excess supply or demand can create inefficiencies in the market.
The document discusses market supply and its key characteristics. It defines supply as the quantities of a good or service that sellers are willing and able to offer for sale at various prices within a given time period, with other factors held constant. Supply is determined by price and time, and comes out of a company's stock or inventory. The main determinants of supply include price, costs of production, technology, taxes/subsidies, and prices of related goods. The law of supply states that, all else equal, supply and price move directly - higher prices lead to increased supply. Market equilibrium exists when supply equals demand.
This document discusses the concept of supply, including the difference between supply and stock, the determinants of supply, and the law of supply. It defines supply as the various quantities of a commodity that producers will offer for sale at a given time at corresponding prices. The key determinants of supply are the price of the commodity, prices of related goods, prices of factors of production, technical knowledge, and producers' goals. The law of supply states that, all else equal, as the price of a commodity increases, the quantity supplied will also increase, and vice versa.
This document provides an overview of market equilibrium and how it is impacted by shifts in supply and demand. It defines key economic concepts such as markets, demand and supply curves, equilibrium price and quantity, surplus and shortage. It then explains how equilibrium is impacted by changes in demand and supply, both independently and simultaneously. Special cases involving perfectly inelastic or elastic demand and supply are covered. The document also discusses consumer surplus, producer surplus, total surplus, and how government intervention through price controls can impact equilibrium and result in deadweight loss. Market failures from externalities and ways to internalize externalities are explained.
This document defines supply as the quantity of goods and services producers are willing and able to provide at various prices over a given period. It distinguishes between stock, which is existing output, and supply, which is output brought to market. The supply schedule shows the different quantities supplied at different prices, while the supply curve graphs this relationship. Determinants that shift the supply curve include improvements in technology, production costs, the number of sellers, taxes and subsidies, and weather conditions.
The document discusses market equilibrium and how supply and demand interact to determine price and quantity in competitive markets. It defines equilibrium price as the price where the quantity demanded is equal to the quantity supplied, resulting in no shortages or surpluses. Disequilibrium occurs when demand and supply are not equal at the existing price, resulting in either a shortage or surplus. The document provides examples of how prices and quantities adjust to changes in demand or supply through shifts in the curves to restore equilibrium. Tasks are included applying these concepts to real world market situations.
The document summarizes the law of supply and key concepts related to supply curves. It states that according to the law of supply, the quantity supplied of a good rises with price and falls with price, assuming other factors remain unchanged. It then discusses individual and market supply schedules and curves, explaining that supply curves slope upward due to factors like costs rising with quantity and higher prices incentivizing increased production. The document notes exceptions to the law of supply and defines movements along the supply curve versus shifts of the entire curve.
The document discusses the concept of supply in economics. It defines supply as the quantity of a commodity producers are willing and able to sell at a given price over a specific time period. The supply of a product is determined by several factors including its price, production costs, technology, government policies, and more. The supply schedule shows the relationship between price and quantity supplied, while the supply curve illustrates this graphically as an upward-sloping curve. Market equilibrium occurs at the price where quantity supplied equals quantity demanded. A change in the supply curve results from changes in its determinants and causes the equilibrium price and quantity to also change.
This document covers key concepts in microeconomics including supply and demand, market structures, price controls, and normal versus inferior goods. It provides definitions and examples of demand, supply, price ceilings, price floors, buffer stocks, and different market models. Situations that cause supply to shift left and the effects of a drought on the corn market over time are also examined using supply and demand diagrams.
The price of vanilla bounced dramatically between 2000 and 2006 due to changes in demand and supply. In 2000, vanilla beans sold for $50 per kilogram but rose to $500 per kilogram in 2003 after a cyclone devastated Madagascar's vanilla crop. By 2006, the price fell again to $25 per kilogram as supplies recovered. Fluctuations in weather and production caused shifts in the supply of vanilla that, combined with demand, resulted in large price swings.
This document provides an overview of key topics in consumer equilibrium and market demand, including:
1. Conditions for consumer equilibrium occur where the marginal utility derived from the last dollar spent on each good is identical.
2. Changes in equilibrium can result from changes in product price or other demand determinants like income.
3. Consumer surplus represents the economic benefit consumers receive when they pay less for a product than they are willing to pay.
This document provides an overview of key topics in consumer equilibrium and market demand, including:
1. Conditions for consumer equilibrium occur where the marginal utility derived from the last dollar spent on each good is identical.
2. Changes in equilibrium can result from changes in product price or other demand determinants like income.
3. Consumer surplus represents the economic benefit consumers receive when they pay less for a product than they are willing to pay.
This document is an instructor's manual for microeconomics. It provides teaching notes, review questions, and exercises for each chapter in the textbook. The manual summarizes the key concepts in each chapter and provides guidance to instructors on effectively teaching the material. The chapter discussed here is on the basics of supply and demand. It reviews the fundamental supply and demand model and how it can be applied to important real-world markets. The manual suggests ways to clarify common student misunderstandings and effectively engage students with the quantitative and applied aspects of supply and demand analysis.
The document defines demand and discusses the key concepts of demand including:
- The difference between needs, wants, and demand
- How demand is represented by demand schedules, demand curves, and demand functions
- The law of demand and how quantity demanded responds inversely to price changes
- Factors that influence demand such as income, population, and tastes
- How elasticity of demand measures the responsiveness of quantity demanded to price and income changes
This document discusses demand analysis and the law of demand. It begins by defining demand and explaining that demand can shift due to various factors that increase or decrease demand for specific products. It then explains the law of demand, which states that quantity demanded varies inversely with price when all other factors are held constant. The document provides a demand schedule and demand curve for Nestle Maggi to illustrate these concepts. It discusses movements along the demand curve due to price changes versus shifts of the demand curve due to non-price factors. Finally, it covers exceptions to the law of demand and factors that can cause the demand curve to slope upward.
The document provides an overview of key concepts in supply and demand including:
- Supply and demand determine equilibrium price and quantity in a competitive market
- The demand curve slopes downward as quantity demanded increases with lower price
- Supply curve slopes upward as quantity supplied increases with higher price
- Equilibrium is reached at the price where quantity supplied equals quantity demanded
- Shifts in supply or demand curves change the equilibrium price and quantity in predictable ways
This document provides an overview of an introductory economics course. It includes 6 study units covering topics like markets, productivity, and international trade. Students will be assessed through tests, assignments, and an examination. The first study unit defines economics as studying how humans make choices in the face of scarcity. It explains that supply and demand determine what goods and services are produced and in what quantities through the interaction of buyers and sellers in a market. The document also outlines factors that shift supply and demand curves, like changes in price, income, and preferences.
The document discusses supply and demand. It defines demand in economics as wanting and being able to purchase a good, rather than just desiring it. Demand refers to willingness and ability to purchase at a given price. The document also discusses factors that affect supply such as price, costs of production, and market supply from multiple sellers. It analyzes factors that influence demand such as price, population, tastes, prices of substitutes and complements, income distribution, expectations, advertising, and taxation policy. It introduces the laws of demand and supply - as price increases, quantity demanded decreases and as price decreases, quantity demanded increases. The law of supply states the opposite - as price rises, quantity supplied rises.
This document summarizes key aspects of prices and the price system from an economics textbook. It discusses the role and benefits of the price system in guiding supply and demand, and its limitations such as externalities and public goods. Market equilibrium occurs when supply and demand are balanced. Surpluses and shortages cause prices to change to restore equilibrium. Shifts in supply or demand also shift the equilibrium point. Governments sometimes set prices to address market limitations or for strategic reasons, establishing price floors, ceilings, and rationing, but this interferes with market forces.
This document summarizes key aspects of prices and the price system from an economics textbook. It discusses the role and benefits of the price system in guiding supply and demand, and its limitations such as externalities and public goods. Market equilibrium occurs when supply and demand are balanced. Surpluses and shortages cause prices to change to restore equilibrium. Shifts in supply or demand also shift the equilibrium point. Governments sometimes set prices to address market limitations or for other reasons, but this interferes with market forces. Price floors, ceilings, and rationing are used to establish boundaries but can prevent equilibrium.
This document discusses economic implications of global food security in the 21st century. It begins with definitions of food security and indicators used to measure it. Current challenges to food security in sub-Saharan Africa are outlined, including low productivity, incomes, and nutrition. Future challenges from population growth, climate change, and resource constraints are also examined. The role of economics in enhancing food security through frameworks analyzing supply and demand is explored. Science and technology are seen as critical to increasing agricultural productivity according to Boserup's view. Initiatives like Africa's Green Revolution are proposed to develop new innovations to meet Africa's growing food needs.
The global food system is undergoing a revolution driven by changing consumer demands and lifestyles. Consumers are increasingly empowered and changing what and how they eat at a rapid pace. However, the food system responds slowly due to production cycles. This mismatch presents a major challenge. Additionally, globalization is connecting food production worldwide but local tastes remain, complicating distribution. Ensuring long-term competitiveness will require greater integration and information sharing across the entire vertical food chain to better serve rapidly evolving consumers.
The document discusses supply and demand equilibrium in markets. It defines the law of supply, individual versus market supply, and short-run versus long-run supply curves. It also discusses the determinants of supply curves and how shifts in supply curves occur due to changes in these determinants. The key factors that determine equilibrium price and quantity in a market are the intersection of supply and demand. Shifts in either supply or demand curves will result in a new equilibrium price and quantity.
The document discusses supply and demand equilibrium in markets. It defines the law of supply, individual versus market supply, and short-run versus long-run supply curves. It also discusses the determinants of supply curves and how shifts in supply curves occur due to changes in these determinants. The key factors that determine equilibrium price and quantity in a market are the intersection of supply and demand. Shifts in either supply or demand curves will result in a new equilibrium price and quantity.
The document discusses supply, demand, and equilibrium in markets. It defines supply and demand, and explains how non-price factors can cause shifts in supply and demand curves. Market equilibrium occurs when quantity demanded equals quantity supplied at the equilibrium price. The document then analyzes how changes in supply and demand curves impact equilibrium price and quantity in both the short-run and long-run using comparative statics analysis. It concludes by discussing how managers must understand supply and demand forces to effectively operate in markets.
The document discusses demand and supply curves, including how they are determined and how they can shift. It also covers market equilibrium and how prices and quantities are set where supply meets demand. Key factors that can cause shifts in supply and demand are discussed, including price changes, income changes, cost of production changes, and government policies like taxes and subsidies. The impacts of these policies on consumer surplus, producer surplus, and deadweight loss are analyzed through examples using supply and demand diagrams.
This document discusses demand, supply, and the laws of demand and supply. It begins by defining demand and the factors that influence demand, including income, population, and expectations. It then defines individual and market demand. Similarly, it defines supply and discusses factors that influence supply. It introduces the laws of demand and supply - the inverse relationship between price and quantity demanded, and the direct relationship between price and quantity supplied. The document also discusses supply and demand schedules and curves, and how equilibrium price is determined by the intersection of the supply and demand curves.
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See how organizational priorities and strategic approaches to data security and privacy are evolving around the globe.
This webinar will review:
- The top 10 privacy insights from the fifth annual Global Privacy Benchmarks Survey
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Webinar Recording: https://www.panagenda.com/webinars/hcl-notes-and-domino-license-cost-reduction-in-the-world-of-dlau/
The introduction of DLAU and the CCB & CCX licensing model caused quite a stir in the HCL community. As a Notes and Domino customer, you may have faced challenges with unexpected user counts and license costs. You probably have questions on how this new licensing approach works and how to benefit from it. Most importantly, you likely have budget constraints and want to save money where possible. Don’t worry, we can help with all of this!
We’ll show you how to fix common misconfigurations that cause higher-than-expected user counts, and how to identify accounts which you can deactivate to save money. There are also frequent patterns that can cause unnecessary cost, like using a person document instead of a mail-in for shared mailboxes. We’ll provide examples and solutions for those as well. And naturally we’ll explain the new licensing model.
Join HCL Ambassador Marc Thomas in this webinar with a special guest appearance from Franz Walder. It will give you the tools and know-how to stay on top of what is going on with Domino licensing. You will be able lower your cost through an optimized configuration and keep it low going forward.
These topics will be covered
- Reducing license cost by finding and fixing misconfigurations and superfluous accounts
- How do CCB and CCX licenses really work?
- Understanding the DLAU tool and how to best utilize it
- Tips for common problem areas, like team mailboxes, functional/test users, etc
- Practical examples and best practices to implement right away
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Webinar Recording: https://www.panagenda.com/webinars/hcl-notes-und-domino-lizenzkostenreduzierung-in-der-welt-von-dlau/
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Wir erklären Ihnen, wie Sie häufige Konfigurationsprobleme lösen können, die dazu führen können, dass mehr Benutzer gezählt werden als nötig, und wie Sie überflüssige oder ungenutzte Konten identifizieren und entfernen können, um Geld zu sparen. Es gibt auch einige Ansätze, die zu unnötigen Ausgaben führen können, z. B. wenn ein Personendokument anstelle eines Mail-Ins für geteilte Mailboxen verwendet wird. Wir zeigen Ihnen solche Fälle und deren Lösungen. Und natürlich erklären wir Ihnen das neue Lizenzmodell.
Nehmen Sie an diesem Webinar teil, bei dem HCL-Ambassador Marc Thomas und Gastredner Franz Walder Ihnen diese neue Welt näherbringen. Es vermittelt Ihnen die Tools und das Know-how, um den Überblick zu bewahren. Sie werden in der Lage sein, Ihre Kosten durch eine optimierte Domino-Konfiguration zu reduzieren und auch in Zukunft gering zu halten.
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- Verstehen des DLAU-Tools und wie man es am besten nutzt
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Custom AI Models: Discover how to leverage FME to build personalized AI models using your data. Whether it’s populating a model with local data for added security or integrating public AI tools, find out how FME facilitates a versatile and secure approach to AI.
We’ll wrap up with a live Q&A session where you can engage with our experts on your specific use cases, and learn more about optimizing your data workflows with AI.
This webinar is ideal for professionals seeking to harness the power of AI within their data management systems while ensuring high levels of customization and security. Whether you're a novice or an expert, gain actionable insights and strategies to elevate your data processes. Join us to see how FME and AI can revolutionize how you work with data!
AI 101: An Introduction to the Basics and Impact of Artificial IntelligenceIndexBug
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2. Administrative Notes
Articles for exam.
Online class articles available now.
Live class articles will become available by the end of this week.
Online Class:
Online students should also pay attention to the quizzes that have been given after the
midterm especially Quiz 5 Parts A and B.
Live class.
Pay attention to the CSUN enrollment example from the notes.
The Online Class Final will be made available on the MoodleCourse Outline after their exam
is finished.
3. Production Possibilities Frontier
Individuals, groups, countries, and societies can enrich themselves collectively and
individually by specializing in the production of goods in which they have a comparative
advantage and exchanging in the market for goods in which they have a comparative
disadvantage (specialization and exchange).
No coercion is necessary to make individuals, groups, countries, and societies specialize
and exchange because it is in their self interest to do so.
The policy or system which increases wealth is therefore to do nothing. This is policy is
also referred to as a free markets policy, capitalism, letting the market operate, etc.
In fact, any interference in voluntary exchange will reduce collective and individual
wealth by limiting the extent to which comparative advantage is exploited.
If comparative advantage exists enrichment is possible through specialization and
exchange. The amount of enrichment, both individual and collective, is proportional to the
degree of comparative advantage.
The more different two parties to a voluntary exchange, the greater the benefits from
exchange.
4. A Second Example of the Benefits of Specialization
According to Comparative Advantage and Exchange.
Original Example
Consider a second example.
Compute opportunity cost in the second example.
Can you characterize the change in
Opportunity costs?
The difference in opportunity costs has
widened, i.e. the farmer and rancher are more
different.
TheSuppose the farmergreater in theproductive
difference in OC is and rancher
second example compared in the original example.
resources, i.e. labor as to the first
What
example. will happen to collective welfare?
What has happened to the individual and collective
For gains from 1/8th vs. 8 to 1/8th. exchange?
Meat: 2 to specialization and
For Potatoes: 1 to 8slide. th to 8.
See next vs. 1/8
Hours Needed to Make 1
pound of
Amount Produced in 40 hrs
Meat
Potatoes
Meat
Potatoes
Farmer
20 hrs./lb
10 hrs./lb
2 lbs.
4 lbs.
Rancher
1 hr./lb.
8 hrs./lb
40 lbs.
5lbs.
Second Example
Hours Needed to Make 1
pound of
Amount Produced in 40 hrs
Potatoes
Meat
Potatoes
Farmer
In the second example to Rancher and the
Farmer are “More Different”.
Meat
40 hrs./lb
5 hrs./lb
1 lbs.
8 lbs.
Rancher
1 hr./lb.
8 hrs./lb
40 lbs.
5lbs.
Opportunity Costs
Original Example
Second Example
Meat
Potatoes
Meat
Potatoes
Farmer
2
1/2
8
1/8
Rancher
1/8
8
1/8
8
5. The Effect of Specialization According to Comparative
Advantage and Exchange: Second Example
Farmer sells 3 lbs. of potatoes for 3 lbs. of meat.
The Outcome Without
Trade
What they Produce
and Consume
Farmer
Rancher
What They
Trade
Get 3 lbs. of Meat
for 1 lb. of
Potatoes
The Gains From Trade
What They Consume
3 lbs. of Meat
3 lbs. of Meat
The Increase in
Consumption
2 lbs. Meat
2 ½ lbs. Meat
Point
A*
A to A*
Point B
4 lbs. Potatoes
8 lbs. Potatoes
Get 3 lbs. of Meat
for 3 lb. of
Potatoes
3 lbs. of Potatoes
5 lbs. of Potatoes
1 lbs. Potatoes
1 lbs. Potatoes
24 lbs. Meat 24
lbs. Meat
Point A
20 lbs. meat
20 lbs. meat
2 ½ lbs.
potatoes
2 ½ lbs.
potatoes
What They
Produce
O lbs. meat O
lbs. meat
1 lb. meat
½ lb. meat
2 lbs.
potatoes
4 lbs.
potatoes
The Outcome With Trade
Give 3 lbs. of Meat
for 1 lb. of
Potatoes
21 lbs. of Meat
21 lbs. of Meat
1 lb. Meat
1 lb. Meat
Give 3 lbs. of Meat
for 3 lb. of
Potatoes
3 lbs. of Potatoes
5 lbs. of Potatoes
2 lbs. Potatoes
2 lbs. Potatoes
Second Example in Blue.
Point
B*
B to B*
½ lb. of Potatoes
2 1/2 lb. of
Potatoes
6. Review of Supply and Demand Concepts
Movement to equilibrium occurs as a result of suppliers and demanders
pursuing their own self interest, e.g. will occur without outside interference.
Movement to equilibrium causes suppliers and demanders to enrich
themselves individually and collectively, i.e. the operation of the market
enriches.
Price at which exchange occurs divides the potential gain from trade
between buyers and seller so that both parties are left better off after
moving to equilibrium than before.
Changes in price act as signals to the market. For the market to operate,
prices must be allowed to fluctuate freely in response to market forces.
7. The Effects of Crop Failure in Africa (1)
The world food market starts in equilibrium with a world price of P1.
The crop failure causes the African food supply to fall.
The decrease in the African food supply creates a situation of excess demand at the price P1. As the market moves to a new short
term equilibrium the price will rise to P2.
There is now a difference in the food prices in Africa vs. the Rest of the World and an opportunity for profit exists by reallocation
food from the Rest of the World to Africa.
Rest of World
Price
Africa
Price
Supply
P1
Supply
P2
Demand
0
Quantity
Demand
0
Quantity
8. The Effects of Crop Failure in Africa (2)
Owners of food in the Rest of the World will ship food to Africa because it is their own self-interest to do so.
As the food is reallocated to Africa, Rest of the World’s food supply falls and Africa’s food supply increases.
Food will continue to be reallocated until it is no longer in the food owners interest to do so, i.e. the price of food in Africa and the Rest the
World has equalized at P3.
If the food supply in the Rest of the World is large relative to the Africa, there will be a small increase in food prices in the Rest of the World
and a large drop in Africa.
Rest of World
Price
Africa
Price
Supply
P3 P
Supply
P2
1
Demand
0
Quantity
Demand
0
Quantity
9. The Effects of Crop Failure in Africa (3)
If governments and international aid organizations “do nothing” market forces will prevent mass starvation by reallocating the
existing supply of food from low valued use in the Rest of the World to high valued use in Africa.
This reallocation of food which alleviates the famine will only occur if the price of food is allowed to move in response to market
forces.
Rest of World
Price
Africa
Price
Supply
P3 P
Supply
P2
1
Demand
0
Quantity
Demand
0
Quantity
10. Effects of Violating the Do-Nothing Policy (1)
Any regulation or interference in the normal operation of the market can be thought as an action that
prevents the market from moving to equilibrium.
In previous slides, we discussed the real world forces that move the market to equilibrium (excess supply
and demand, desire to engage in trade which makes one better off, etc.).
Any interference in the movement to equilibrium can be thought of as an attempt to prevent people
from engaging in a behavior that they want to engage in or in engaging in behavior that will make the
person, in his own mind, better off or richer.
When government tries to prevent people from engaging in behavior that they believe will make
them better off, people will resist.
The regulation will set off a process of resistance, increasing regulation/enforcement, more
resistance, more regulation, etc.
It may be impossible or extremely costly for the government to effectively impose regulation and
the result of regulation or interference in the normal operation may not be what was originally
intended.
Regulation will also force people to rely on non-price measures to allocate scarce supplies of the
good.
The type of non-price rationing that will be used depends on the particulars of the good and the
details of the regulation scheme.
11. CSUN Enrollment Policy
Price
Why is the supply curve vertical?
Supply
If the price were not regulated how
would the market allocated the scarce
supply of course?
Controlled Price
Shortage
Demand
0
Quantity
12. CSUN Enrollment Policy
P
Supply
CSUN Course Enrollment.
The goal of CSUN enrollment policy
is to allocate the scarce supply of
classes according to non-price
criteria.
Number of classes fixed by the
physical plant and number of
professors.
Is the allocation of classes “better”
or just different under a non-price
allocation system?
Instead of allocating courses
according to their value to the
student, the courses are
allocated according to other
criteria.
Number of units
completed.
Is the allocation of classes the one
intended by CSUN administrators?
Gaming the system.
First time freshman.
Graduating seniors.
Orientation Aides.
Controlled Price
Shortage
1
Demand
Q
20K
13. Review
Change in the World:
1. Price.
2. Price of Related Goods
3.Income
4. Other
Elasticities tell us how much and in
which direction will demand change?
1. Price Elasticity-Elastic or Inelastic
2. Cross Price Elasticity-Complements or
Substitutes
3. Income Elasticity-Normal or Inferior
4. Other
Price Elasticity of Demand
Cross Price Elasticity
Income Elasticity
d
=
% Q
% P
Percent Change in Quantity of Good 1
Percent Change in Price of Good 2
Percent Change in Quantity
Percent Change in Income
14. Start off in Long Run Equilibrium
Constant or Increasing Cost Industry?
Change in the world: Newspaper article or other source.
1. Change in Demand (normal/inferior, complements/substitutes).
• Change in income, change in the price of a related good, change in preferences.
2. Change in the price of inputs.
• Increased wages, higher interest rates, higher fuel costs, higher insurance, etc.
3. Change in technology.
4. Other
Unit cost curves: Will a firm’s unit cost curves shift up or
down?
At the current price, will existing firms produce more or less
Short Run Supply: Shift to the right or left
Where is the new short run equilibrium?
At the new price will existing firms be losing money,
making money breaking even.
Long Run Changes: What effect will entry and exit of firms
cause to the short run supply curve, output, and price. Is
this an Increasing or Constant Cost Industry
Demand: Shift to the right or left.
1. Where is the new short run Equilibrium?
2. What is the new price?
Short Run Changes: at the new price how will existing
firms adjust output?
Apply 3-Part Output Rule, i.e. shutdown decision and short
run output decision
Long Run Changes: What effect will entry and exit of firms
cause to the short run supply curve, output, and price. Is this
an Increasing or Constant Cost Industry?
16. The left hand graph shows the unit cost curves for a single firm producing the good. An industry is composed of many
firms with identical cost curves all producing the same good.
Initial Condition: Long Run Equilibrium
The Short Run Market Supply curve shows the amount produced by the existing firms as price varies. The Long Run
supply curve shows how the amount produces as price varies when the effects of entry and exit to the industry are
included.
Market
Representative Firm
$/unit
MC
Price
ATC
S 100 firms
A
P1
Long-run
supply
P1
D1
0
Quantity
(firm)
0
Q1
Quantity
(market)
18. Short-Run Response to an increase in Demand
The increase in demand (D1 to D2)
causes the price in to increase.
At current output levels (Q1-industry, q1-firm) the
existing firms are producing where P >MC.
Therefore, they can increase profits by increasing
Market
Firm
output.
$/unit
Price
MC
ATC
B
S 100 firms
A
P1
Long-run
supply
P1
D2
D1
0
q1
Quantity
The increase in output by existing firms causes 0
a
(firm)
movement along the short run supply curve (S1) from A
to B.
Q1
Quantity
(market)
19. Short-Run Response to an increase in Demand
Since all existing firms are increasing output,
industry output increases from Q1 to Q2.
Market
Firm
$/unit
Price
MC
P2
P1
0
ATC
B
P2
Existing firms choose their output P1
level by setting price equal to MC.
Since the price has risen, the
quantity at which P=MC is now
higher.
Therefore, existing firms increase 0
Quantity
output. (firm)
S 100 firms
A
Long-run
supply
D2
D1
Q1
Q2
Quantity
(market)
20. Short-Run Response to an increase in Demand
In the short run, the existing firms will earn a profit.
Market
Firm
$/unit
Price
Profit
MC
ATC
B
P2
P2
P1
S 100 firms
P1
A
Long-run
supply
D2
D1
0
Quantity
(firm)
0
Q1
Q2
Quantity
(market)
21. Increase in Demand in the Long Run
Over time, the short-run supply curve shifts as
profits encourage new firms to enter the market.
Price falls as new firms enter the market
In the new long-run equilibrium profits return to
zero and price returns to minimum average total
cost.
The market has more firms to satisfy the greater
demand.
22. At price P2, existing firms are earning a profit.
Entrepreneurs see the profit earned by existing firms and open new firms (enter
the industry).
Long-Run Response
Market
Firm
Price
Price
Profit
MC
ATC
B
P2
P2
P1
S100 firms
P1
A
Long-run
supply
D2
D1
0
Quantity
(firm)
0
Q1
Q2
Quantity
(market)
23. As new firms enter, the amount of the good produced at each price by the
existing firms (new and old) has increased.
This is depicted as a shift in the short run supply curve from S1 to S2.
Long-Run Response
Market
Firm
Price
Price
Profit
MC
ATC
B
P2
P2
P1
S100firms
S150 firms
Long-run
supply
D2
D1
Q2
Quantity
(market)
P1
0
Quantity
(firm)
0
A
Q1
24. Long-Run Response
As the new firms begin producing, the price falls from P2 to P1.
Market
Firm
$/unit
Price
MC
ATC
B
P2
P1
0
S100firms
S150 firms
Long-run
supply
D2
D1
Q2
Quantity
(market)
A
P1
Quantity
(firm)
0
Q1
25. Increase in Demand in the Short and
Long Run
New firms will continue to enter the industry, increasing the quantity produced,
shifting the short run supply curve outward, and driving down the price until
potential entrants no longer anticipate earning a profit after entering the industry.
Market
Firm
$/unit
Price
MC
ATC
B
S100firms
S150 firms
C
Long-run
supply
D2
D1
Q2
Q3
A
P1
0
P1
Quantity
(firm)
0
Q1
Quantity
(market)
26. An Increasing Cost Industry-Oil Industry
$/unit
MCSaudia Arabia
P1=$30
Profit
ATCSaudia Arabia
P1=$10
Profit
Price is above
ATC so SA
makes a profit
at P-$10
In 1930, oil was only produced in the Middle East, the demand for oil was
not that great, and the price of oil was low—P1. At P1 it was profitable to
produce oil in Saudi Arabia and other parts of the Middle East but not in
other parts of the world.
As the 20th century progressed, the demand for oil increased. There was a
short term increase in Middle Eastern oil production and in the long run (point
B), the high price of oil led to the discovery of higher cost deposits in other
parts of the world.
Will the entry of new firms, i.e. the discovery of new oil deposits outside
the Middle East, eliminate the oil profits of Saudi Arabia?
Quantity
(firm)
$/unit
MCrest of world
At P-$30, the price is above min
ATC so the Rest of the World
P
produces oil.
ATCrest of world
B
A
P2=$30
AVCrest of world
D1970
A
P1=$10
0
SMiddle East
SME + rest of world
LRS
P1
q1
Quantity
(firm)
Price is below
min AVC so
Rest of World
does no
produce at P$10
D1930
0
Q1
Quantity
(market)
28. Supply Side Changes.
Changes in input prices
Changes in Technology.
Start off by shifting unit cost curves.
Winners and losers.
29. Analyzing the effect of a decrease in the price of labor
1.
2.
3.
4.
Will the likely new contract increase of decrease the cost of production?
Will unit costs at any output level increase or decrease?
At any given price will existing firms produce more or less?
What effect will this have on the short run supply curve?
After the decrease in the price of labor, the unit costs of production are lower at
each level of output. At every price each firm will produce more (at P1 the firm will
increase output from q1 to q2).
The increase in output at each price by existing firms causes
the short run supply curve to shift right, lowering price to P2
L
$/unit
Price
MC
S100 firms
P1
ATC
A
A
Long-run
supply
P1
AVC
P2
S100 firms
D1
0
q1
q2
Quantity
(firm)
0
Q1
Quantity
(market)
30. Who benefits and loses from a reduction in the cost of labor.
Consumers are better off because the price of the good has fallen.
In the short run, firms are better off because their costs fall and they earn a profit.
In the long run, if the existing firms are earning a profit because of lower costs, new firms will enter shifting the short run supply curve to the
right, increasing output, and further lowering price.
If this were a constant cost industry, the reduction in the cost of labor would cause the long run supply curve to shift down.
In the Long Run, consumers are the sole beneficiary of the drop in the price of labor.
The reduced unit costs of production mean that at any given price the existing firms will produce more, shifting the short run supply curve
outward. Even at the new lower price, the existing firms will earn a profit in the short run.
In the long run, new firms will continue entering shifting the SR supply curve farther to the right, increasing supply, and reducing price until
the existing firms are just breaking even with their lower costs.
$/unit
Price
MC
S100 firms
P1
ATC
A
A
S150 firms
Long-run
supply
P1
AVC
P2
P3
0
S100 firms
D1
q1
q2
Quantity
(firm)
0
Q1
Quantity
(market)
31. Who benefits from an improvement in technology?
An improvement in technology is any change which allows a firm to produce more output with the same inputs.
A degredation in technology is any change which means a firm to produces less output with the same inputs.
The reduced unit costs of production mean that at any given price the
existing firms will produce more, shifting the short runs supply curve
The improvement in technology allows the firm to produce more
outward. Even at the new lower price, the existing firms will earn a profit
output with the same inputs.
in the short run.
Because the firm is producing more output with fewer inputs, and
the price of inputs hasn’t changed, the unit costs of producing will
In the long run, new firms will continue entering shifting the SR supply
fall.
curve farther to the right, increasing supply, and reducing price until the
existing firms are just breaking even with their lower costs.
In the SR, firms and consumers benefit from the improvement in
technology. In the LR just consumers benefit.
$/unit
Price
MC
S1
ATC
A
P1
A
S2
S3
Long-run
supply
P1
AVC
D1
Quantity
q1
(firm)
If this were a constant cost industry, the technological change
would shift the long run supply curve down.
0
0
Q1
Quantity
(market)