AP 经济

Demand,Supply,andMarketEquilibriumMarket•Aplaceforabuyerandasellertomeet•Institutionthatbringsbuyersandsellersintocontact•PricescoordinatingsignalsDemand•Relationshipbetweenpriceandquantityofproductconsumersarewillingtobuyatthatpriceinaspecifiedperiodoftime•canbeshownasacurveorinatableDemandScheduleDemandforCornPriceperBushel(indollars)QuantityDemandedperWeek510420335255180DemandCurve0102030405060700123456Price(perbushel)QuantityDemanded(bushelsperweek)LawofDemand•Whenthepriceofaproductincreasesthequantitydemandeddecreases•WhenthepriceofaproductfallsthequantitydemandedincreasesNote•Becausepriceandquantitymoveintheoppositedirectioninverseornegativerelationship•Assumption:all-other-things-being-equalorceterisparibusIntuitionforLawofDemand•Commonsense–priceisanobstacle•DecreaseMarginalUtility•IncomeandsubstitutioneffectAnotherwaytolookatdemand•MarginalUtilityWillingnesstopay1.000.750.50.25P=0.30.1QuantityADemandCurvePDQQMarketDemandMarketDemandforCornThreeBuyersPriceperBushelQuantitydemandedTotalQuantityDemandedperWeekJoeJenJay51012830420231760335392610025560391541808754221MarketDemandPPP+=DmDDQQQDeterminantsofDemand•Changeinthenumberofbuyers•Incomeorincomeexpectation•Consumertastes•Pricesofrelatedproducts•Taxesandregulations•Expectedfuturepricesoftheproduct•Normalgood–consumptionincreasesasincomeincreases•Inferiorgood–consumptiondecreasesasincomeincreases•Giffengood–goodforwhichthereisanupwardslopingdemandcurve(theoretical)•Substitutegoods(substitutes)–canbeusedinplaceofeachother•Complementarygoods(complements)–havetobeusedtogether•Unrelatedgoods,independentgoodsChangeinthequantitydemandedandchangeindemand•Priceoftheproductchangeinquantitydemanded•DeterminantsofdemandchangeindemandQuestion“Inthecornmarket,demandoftenexceedssupplyandsupplysometimesexceedsdemand.”“Thepriceofcornrisesandfallsinresponsetochangesinsupplyanddemand.”Inwhichofthesetwostatementsaretheterms“supply”and“demand”usedcorrectly?Explain.IncreaseinDemandSPeD2D1QePQDecreaseinDemandSPeD2D1QePQSupply•Relationshipbetweenpriceandhowmuchproductproducers(suppliers,sellers)arewillingtosellatthegivenpriceduringspecificperiod•CanbeshownasatableoracurveLawofSupply•Aspricerisethequantitysuppliedrises;aspricesfallthequantitysuppliedfalls•Revenue(notobstacle)•IncreasingmarginalcostSupplyScheduleSupplyofCornPriceperBushel(indollars)QuantitySupplierperWeek56045033522015SupplyCurve0123456010203040506070Price(perbushel)QuantitySupplied(bushelsperweek)DeterminantsofSupply•Pricesofinputsrequiredtomaketheproduct•Technologyandproductivity•Expectedfuturepriceoftheproduct•Changeinthenumberofsellers•Taxesandsubsidies•PriceofothergoodsChangeinthequantitysuppliedandchangeinsupply•Priceoftheproductchangeinquantitysupplied•DeterminantsofsupplychangeinsupplyIncreaseinSupplyPSPeQeQDecreaseinSupplyPSPeQeQEquilibriumPricePSPeDQeQShortagePSPePDQsQeQdSurplusPSPeDQdQeQsQFunctionsofPrices•Rationing•Productiveefficiency•AllocativeefficiencyEfficiency•Technologicalefficiency(themostoutputperdollarspentoninputs)•Allocativeefficiency(maxU,maxProfits)•Paretoefficiency:(can’tmakeanyonebetteroffwithoutmakingsomeoneworseoff)Question•Imagineadictator,likeMuammarKadafi,whoownseverythinginthecountry•Therestofthepeopleinthecountryownnothing(0)•IsitParetoefficient?ChangesinSupply,Demand,andEquilibriumIncreaseinDemandSPeD2D1QePQDecreaseinDemandSPeD2D1QePQIncreaseinSupplyPSPeDQeQDecreaseinSupplyPSPeDQeQSupplyIncreasesmorethanDemandDecreasesPSPeDQeQSupplyIncreaseslessthanDemandDecreasesPSPeDQeQSupplyDecreasesmorethanDemandIncreasesPSPeDQeQSupplyDecreaseslessthanDemandIncreasesPSPeDQeQSupplyDecreasesmorethanDemandDecreasesPSPeDQeQSupplyDecreaseslessthanDemandDecreasesPSPeDQeQSupplyIncreasesmorethanDemandIncreasesPSPeDQeQSupplyIncreaseslessthanDemandIncreasesPSPeDQeQPriceceiling–maximumlegalpriceasellermaychargePSPePcDQeQPriceceilingcontinued•Bindingandnotbinding•Rationing(coupons)•BlackMarkets•RentControls•ShiftsinDemandandSupplyCurvesRentcontrols(ShortRun)PSPcDQsQRentcontrols(LongRun)PSPcD2QsQdQMarketforHumanOrgansPS1D1Q1Q3QMarketforHumanOrgans(cont.)PS1S2P2D1Q1Q2Q3QPricefloor–minimumlegalpriceasellermaychargePSPfPeDQeQPricefloorcontinued•Governmentsupplyrestriction•Governmentpurchaseofthesurplus•Consumerspayhigherprices•Taxpayerspayhighertaxes•Higherimportsleadtotariffs,whichleadstoretaliationbyforeigncountriesExamplesfromtheappendixDecreaseinSupplyPSPeDQeQCornandEthanolSPeD2D1QePQPinkSalmonPSPeDQeQThemarketforgasolinePSPeDQeQSushiPSPeDQeQOlympicFigureSkatingFinalsPSPcshortageD2QsQdQOlympicCurlingPreliminariesPSPcsurplusD2QdQsQTheUSEconomy:PrivateandPublicSector•Privatesector(householdsandbusinesses)•Publicsector(government)CircularFlowModelResourceMarket-Householdssell-BusinessesbuyHouseholds-sellresources-buyproductsProductMarket-businessessell-householdsbuyBusinesses-buyresources-sellproductsHouseholds•Oneormorepersonsoccupyingahousingunit•Suppliersofeconomicresources(incomereceivers)•Consumersintheproductsmarket(spenders)FunctionalDistributionofIncomeWagesandSalaries,7874Proprietor'sI