BUS 207 Study Guide - Final Guide: Adverse Selection, Bid Rigging, Taipei Metro

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 207
• Professor: Karen Ruckman

Document Summary

Marginal benefits total benefits of last unit consumed. Goes down w/ more units consumed diminishing marginal returns. Addition to tc from last unit produce. Always increasing = opportunity cost of leisure forgone. Determinants: own price = along, income = shifts, price of related goods = shifts. Relationship between p&q and all other demand factors. Dc relationship only between p&q hold others constant. Mr will always have the double slope of tr (inverse dc= p= 2+q) Good = 1 more unit= tr goes up(until you are profit maximizing) Bad= 1 more unit =price goes down! Mr can go negative = when bad outweighs the good. To figure out when the bad outweighs the good. Income elasticity sign matters: m/q * dq/dm income/quantity * derivative of q in respect to m a. i. Positive normal good decimal = necessities, whole #=luxuries. First term is always p over q second term is always q over p: cross price elasticity, py/qx * dqx/dpy.