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ECON 208 Chapter Notes -Conspicuous Consumption

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peachdeer29
23 Mar 2012
School
McGill University
Department
Economics
Course
ECON 208
Professor
Lee Ohanian

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ECON 208 Full Course Notes
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ECON 208 Full Course Notes
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Document Summary

No market or industry exists in isolation from the economy"s many other markets: feedback: changes in one market that cause changes in another. Partial-equilibrium analysis: examines a single market in isolation and ignores feedback effects from other markets. In general, this is appropriate when the specific market is quite small relative to the entire economy: most of microeconomics uses partial-equilibrium. General-equilibrium analysis: more complicated because it involves the analysis of all of the economy"s markets simultaneously: recognizing the interactions among the various markets, recognizing how events in each market affect other markets. Market linkages and interactions: linkages exist with mobile demand and supply. Joint production linkages: when things are produced together; when one product is the by-product of another. Input/output linkages: when one product is necessary to produce the other: linkages through resource constraints: cause links even between largely unrelated products. If on the production possibilities boundary, that must mean that there will be fewer jobs elsewhere.

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Related Questions

how is the healthcare market different from other markets?
 
a. The consumers and producers in the healthcare market rarely interact with one another in terms of prices and the amount to pay compared to other markets.
b. Consumers in the healthcare market are encouraged to underproduce.
c. Consumers in the healthcare market are encouraged to under consume.
d. The consumers and producers in the healthcare market interact with one another more frequently in terms of prices and the amount to pay compared to other markets.
e. Producers in the healthcare market are encouraged to underproduce.
 

Examine the effects of supply and demand of cereal.
1. How do markets operate to bring this product into existence?
2. Think about how these different markets work together to create a new product. How does that relationship affect supply and demand for the various markets involved?
3. In what ways has the change in supply and demand affected market?
4. What enabled the many participants in the production of this product to cooperate, and how has this affected the production of the product.

Business Week recently declared, "We have entered the Age of the Internet" and observed that when markets for goods or services gain access to the Internet, more consumers and more businesses participate in the market. Use supply and demand analysis to predict the effect of e-commerce on equilibrium output and equilibrium price of products gaining a presence on the Internet.