Study Guides (248,623)
United States (123,469)
Economics (7)
All (1)

An Economics Perspective Review Notes for Final Exam - 4.0ed the exam!

8 Pages

Course Code
ECON 150C1

This preview shows pages 1,2 and half of page 3. Sign up to view the full 8 pages of the document.
Summary  from  the  review  section  Econ  150  C1:  12/11/12     • Allocation  vs.  Distribution:     -­‐ Allocation  in  Economics:  allocating  scarce resources. -­‐ Distribution: distributing stuffs (real actions) -­‐ Market prices can achieve efficient allocations (how are scarce resources used, given preferences and wealth?), but they do not take care of the distribution (who should have more wealth?). • What prices do: Prices convey information about value, without needing to have any one person actually do the calculations. Market works well when price convey the right information, fail when not. • Supply and Demand: -­‐ Supply makes stuff, demand buys stuff -­‐ A supply curve tells us how much producers make at each price. -­‐ Supply shifters: input prices… -­‐ Demand curve tells us how much people will buy at each price. -­‐ Demand shifters: supplement and complement goods -­‐ Equilibrium, Excess Supply, Excess Demand -­‐ Draw graphs by yourselves. • Price taker: Perfect competition:” Producers and consumers are price-takers.        When  price-­‐takers  adjust  how  much  they  make  or  buy,  they  do  not  affect  the  price.   • The  price  at  which  supply  equals  demand  is  the  equilibrium  price  or  the  market-­‐ clearing  price. • Opportunity cost is the cost of forgoing the next-best option • The three things that make electricity special: no storage, fixed retail pricing, and expensive plants use cheap fuel • How the type and cost of electricity generation vary throughout the year and day: highest in the summer -­‐ Coal  is  expensive  to  build  but  the  fuel  has  historically  been  cheap.   -­‐ Nuclear  is  extremely  expensive  to  build  but  the  fuel  (uranium)  has  historically   been  extremely  cheap.   -­‐ Natural  gas  has  been  cheap  to  build  but  the  fuel  has  historically  been   expensive. -­‐ Not  true  now  with  shale  gas... * What are our electricity sources during a day? Nuclear, coal, renewable (solar, biomass, hydro), wind, gas • • Private goods, club goods, open-access and public goods Excludable Non excludable rivalrous Private goods (most Common or open-access goods) goods
(beach, village pasture) Non rivalrous Club goods (satellite Public goods (lighthouse, television) military) • Excludable: It is possible to prevent people from having access to the good. • Rivalrous: When one person uses a good, someone else cannot use it. • Pareto improvement: An action makes somebody better off without making anyone worse off • Pareto optimum: There are no possible Pareto improvements; every possible trade creates at least one loser. • Pareto improvement: An action makes somebody better off without making anyone worse off • Utility: An individual’s well-being • Economists  assume  people  make  decisions  to  maximize  their  utility. • They  also  typically  assume  that  having  more  of  a  good  thing  increases  utility,  but   that  the  first  units  increase  utility  most.  
More Less
Unlock Document

Only pages 1,2 and half of page 3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.