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Introductory Microeconomic Analysis
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Class Notes

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CAS EC 101 Lecture Notes - Lecture 3: Latte, Demand Curve, Opportunity Cost

People are rational: people know what they want. Every decision involves an opportunity cost (most important!!: ex: if you choose not come to class, yo

CAS EC 101 Lecture Notes - Lecture 3: Demand Curve

CAS EC 101 Lecture 4: EC101_Watson_Lecture4

Quantity demanded: a single point on a demand curve. What are the factors that can cause an increase in demand? (shift right) Price of related goods: p

CAS EC 101 Lecture Notes - Lecture 5: Price Ceiling, Rent Regulation, Price Floor

When demand curve and supply curve intersect. Price will be drawn back toward equilibrium price because it is the natural adjustment process. If there

CAS EC 101 Lecture Notes - Lecture 6: Comparative Statics, Economic Equilibrium, Demand Curve

Change the value of one of the non-price determinants of supply or demand. Assume that the price of dvd players declines: the price of a complement dec

CAS EC 101 Lecture Notes - Lecture 7: Demand Curve

Price of dvd players decreases by an average of per player. Quantity of dvd players sold increases by 1 million units. Price of gas decreases by avera

CAS EC 101 Lecture Notes - Lecture 8: Normal Good, Laser Printing

Availability of close substitutes: demand for a good with close substitutes is more elastic. Passage of time: longer the period of time, the more elast

CAS EC 101 Lecture Notes - Lecture 9: Indifference Curve

CAS EC 101 Lecture Notes - Lecture 10: Opportunity Cost, Marginal Utility, Indifference Curve

CAS EC 101 Lecture Notes - Lecture 11: Indifference Curve, Budget Constraint, Price Floor

Percent change in qd over percent change in price. Measure of how sensitive quantity demanded is to changes in price. If the absolute value of the pric

CAS EC 101 Lecture Notes - Lecture 12: Budget Constraint, Indifference Curve

CAS EC 101 Lecture Notes - Lecture 15: Budget Constraint, Indifference Curve, Normal Good

CAS EC 101 Lecture Notes - Lecture 15: Giffen Good, Budget Constraint, Demand Curve

Always the same if both are normal goods. This table represents when the price of calls to france (pf) decreases. In this case, the income effect domin

CAS EC 101 Lecture Notes - Lecture 16: Budget Constraint, Consumer Choice, Normal Good

Ec 101 lecture 14 - substitution and income effect. The best combination of goods for a consumer is the point where the budget constraint is tangent to

CAS EC 101 Lecture 16: EC101_Watson_Lecture 14

CAS EC 101 Lecture Notes - Lecture 17: Gatorade, Budget Constraint, Indifference Curve

CAS EC 101 Lecture Notes - Lecture 18: Variable Cost, Fixed Cost, Marginal Cost

The total cost of producing q units of output. The average cost of producing one unit of output. The cost of producing one more output. Theoretical equ

CAS EC 101 Lecture Notes - Lecture 19: Ferrari Monza, Marginal Revenue, Perfect Competition

P= price per unit of the good. Shows the total amount of money gained by a producer by selling a certain amount of a good. Ex: a grocery store sells 20

CAS EC 101 Lecture Notes - Lecture 19: Market Power, Profit Maximization, Perfect Competition

CAS EC 101 Lecture Notes - Lecture 21: Average Variable Cost, Demand Curve, Economic Equilibrium

Ec 101 lecture 21 - accounting profits and economic profits / entry & exit to market. As long as the firm is above the shut down cut off, which is the

CAS EC 101 Lecture 21: EC101_Watson_Lecture16

Implicit costs: foregone salary, foregone interest, total implicit costs. = total explicit costs + total implicit costs. Say tr = 5,000; then accountin

CAS EC 101 Lecture Notes - Lecture 22: Monopoly Price, Perfect Competition, Takers

If market is in perfect competition, then firms are price takers, which means that they take the market price and have to produce at that cost. Example

CAS EC 101 Lecture Notes - Lecture 22: De Beers, Market Power, Bauxite

CAS EC 101 Lecture Notes - Lecture 23: Monopolistic Competition, Perfect Competition, Demand Curve

Free entry and exit: like perfect competition. Downward sloping demand curve: more elastic than monopoly. Determining profit max quantity for monopolis

CAS EC 101 Lecture Notes - Lecture 23: Monopolistic Competition, Marginal Revenue, Demand Curve

Free entry and exit -> like perfect competition. Downward sloping demand curve -> like monopoly. These firms are the only ones that are able to b

CAS EC 101 Lecture Notes - Lecture 24: Concentration Ratio, Oligopoly, Strategic Dominance

Concentration ratio the percentage of markets total output supplied by its four largest firms. Higher the concentration ratio, the less competition. A

CAS EC 101 Lecture Notes - Lecture 24: Game Players, Oligopoly, Perfect Competition

Ec 101 lecture 24 oligopoly & game theory. Oligopoly: a market structure in which only a few sellers offer similar or identical products. Does not

CAS EC 101 Lecture Notes - Lecture 25: Budget Constraint, Indifference Curve, Opportunity Cost

Households supply labor and raw materials in exchange for salary and wages from the firms in order to buy other goods and services. Money (salary and w

CAS EC 101 Lecture Notes - Lecture 25: Budget Constraint

CAS EC 101 Lecture Notes - Lecture 26: Equilibrium Point, Marginal Cost, Marginal Revenue Productivity Theory Of Wages

Ec 101 lecture 26 - shifts in the labor supply curve / labor demand. For example: if there are more immigrants, it means that there are more possible w

CAS EC 101 Lecture Notes - Lecture 26: Marginal Product, Demand Curve, Marginal Revenue

Demographics: age distribution (to young, too old) When one of the non-wage determinants of ls changes, curve shifts right. Increase in population: cha

CAS EC 101 Lecture Notes - Lecture 30: Masala Chai, Demand Curve, Marginal Cost

CAS EC 101 Lecture Notes - Lecture 30: Economic Surplus, Demand Curve, Marginal Cost

CAS EC 101 Lecture Notes - Lecture 31: Pareto Efficiency, Price Ceiling, Price Floor

CAS EC 101 Lecture Notes - Lecture 31: Price Ceiling, Price Floor, Pareto Efficiency

CAS EC 101 Lecture Notes - Lecture 32: Trade Route, Absolute Advantage, Comparative Advantage

CAS EC 101 Lecture Notes - Lecture 32: Absolute Advantage, Trade Route, Opportunity Cost

Ec 101 lecture 32 - welfare economics: basics of trade. Trading provides job specialization because not every country is equally as good as producing a

CAS EC 101 Lecture Notes - Lecture 33: Autarky, Voluntary Export Restraints, Economic Equilibrium

CAS EC 101 Lecture Notes - Lecture 33: Absolute Advantage, Comparative Advantage, Abundant Number

The buying and selling of goods and services. The basis of trade is comparative advantage, not absolute advantage. It is possible to have an absolute a

CAS EC 101 Lecture Notes - Lecture 36: Pareto Efficiency, Imperfect Competition, Perfect Competition

Asymmetric information: adverse selection, market unraveling , remedies, screening, signaling. There are many firms producing homogeneous products: non

CAS EC 101 Lecture Notes - Lecture 36: Imperfect Competition, Adverse Selection, Perfect Competition

When a product loses its value over time or over the number of uses. Ex: once you drive a brand new car out of the dealership, the value of the car dec

CAS EC 101 Lecture Notes - Lecture 37: Moral Hazard, Externality

Market screening: process where an uninformed party attempts to gather information about the product or service offered by the informed party, example:

CAS EC 101 Lecture Notes - Lecture 37: Deadweight Loss, Social Cost, Economic Surplus

CAS EC 101 Lecture 38: notes11.30.18

CAS EC 101 Lecture Notes - Lecture 39: Imperfect Competition, Perfect Competition, Externality

Externality: the effect on a third party (who was not involved in the production/consumption process) caused by the production or consumption of a good

CAS EC 101 Lecture Notes - Lecture 39: Marginal Cost, Demand Curve, Externality

CAS EC 101 Lecture Notes - Lecture 40: Deadweight Loss, Demand Curve, Externality

CAS EC 101 Lecture Notes - Lecture 40: Social Cost, Externality, Everytime

The consumption of a good or service causes affects a third party"s situation. Marginal private benefit (mpb): the benefit that the person gets for eac

CAS EC 101 Lecture Notes - Lecture 41: Arthur Cecil Pigou, Coase Theorem, Demand Curve

Ec 101 lecture 41 - responses to externalities. **supply curve always show marginal private cost. The marginal social cost is only equal to marginal pr

CAS EC 101 Lecture Notes - Lecture 41: Coase Theorem, Deadweight Loss, Influenza Vaccine

The dwl is below msc and above mpc. The market, left alone, gets quantity wrong. Msc = marginal private cost + additional cost to society. The dwl is b