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Econ 4.3
Friday, January 29, 1999
Announcements: The
first exam will be Monday, February 1. It will be multiple
choice. Bring a #2 pencil.
Exam 1 Comments
Markets, Demand and Supply
- Multiple choice exam
- #2 Pencil
- Includes text chapteres 1-5
- Know terms and concepts, usually listed at
end of chapter
- Policy for missed exams (see syllabus)
- Ability to interpret graphs
- Think analytically
- Practice Case/Fair website
- To calculate your grade: Divide score by
33, multiply by 100 and then match grade up with the
syllabus
Lecture notes:
Substitute Goods
- When P of one good rises, Q
of substitute good sold increases
- When P of one good falls, Q
of substitute goods sold falls
- The price of pizza goes us
when the quantity of burgers sold rises
Complementary Goods
- When quantity of one good
sold rises, Q of complementary good sold increases
- When quantity of one good
sold falls, Q of complementary good sold decreases
Market and Prices
- Economic discrimination and
resource allocation
- Price discrimination
- Age
- Gender
- Race
- Time
- Geographic
- Planners' Preferences
Price Ceilings: Rent
Control
- Price Ceiling: a maximum
price that sellers may charge for a good, usually set by
government
- Price ceilings below the
equilibrium are a shortage and price ceilings above the
equilibrium are a surplus
Trade of Comparative
Advantage and Absolute Advantage
- Absolute Advantage:
the advantage in the production of a product enjoyed by
one country over another when it uses fewer resources to
produce that produc than the other country does
- Comparative
Advantage: the advantage in the production of a
product enjoyed by one country over another when that
product can be produced at lower cost in terms of other
goods than it could be in the other country
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