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AP MICROECONOMICS UNIT II
MARKETS |
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OUTLINE |
UNIT OBJECTIVES |
READINGS FROM McCONNELL/BRUE |
GRAPHS |
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1.
DEMAND – Chapter 3, pp. 48 - 52
a.
LAW OF DEMAND
i.
CHANGE IN P= INVERSE CHANGE IN
Qd
a)
DMU, INCOME, SUBSTITUTION EFFECT
b.
NPD = CHANGE IN D
i.
TASTES
ii.
INCOME
iii.
MORE
OR FEWER BUYERS
iv.
EXPECTATIONS
v.
RELATED
GOODS' PRICES
a)
SUBS = SAME; COMPS = OPPOSITE
CHANGE IN D
CHANGE IN D
2.
SUPPLY – Chapter 3, pp. 53-55
a.
LAW OF SUPPLY
i.
CHANGE IN P = DIRECT CHANGE IN
Qs
a)
DIMINISHING RETURNS
a)
TOTAL REVENUE =PRICE
X QUANTITY
b.
NPD= CHANGE IN S
i.
GOVERNMENT
a)
TAXES/SUBSIDIES
a)
PRICE CONTROLS
ii.
OTHER
PROFIT OPPORTUNITIES
iii.
NUMBER
OF SUPPLIERS
iv.
INVESTMENT
IN TECHNOLOGY
v.
COST
OF RESOURCE
vi.
EXPECTATIONS
CHANGE IN S
CHANGE IN S
3.
EQUILIBRIUM – Chapter 3, pp.
56-69
a.
SHORTAGE and SURPLUS
b.
EQUILIBRIUM and EFFICIENCY |
1.
Describe the behavior of buyers
and sellers in a competitive
market
2.
Explain the determinants of
Demand
3.
Explain the determinants of
Supply
4.
Distinguish between the Income
and Substitution effect
5.
Define Diminishing Marginal
Utility and apply it to the
Demand curve
6.
Draw a graph from Supply and
Demand schedules
7.
Define Equilibrium
8.
Determine what Equilibrium price
and quantity will be given the
Demand and Supply data for a
good
9.
Differentiate "changes in
demand" and "changes in quantity
demanded"
10.
Differentiate between a
"change in supply" and a "change
in quantity supplied"
11.
Analyze factors and
situations that cause Supply and
Demand curves to shift
12.
Predict the effects of changes
in the prices and quantities of
Substitute and Complementary
goods on the equilibrium price
and quantity of a good
13.
Explain shifts in the
Supply and Demand curves based
on changes in Supply and Demand |
Chapter 3
SUPPLEMENTAL SOURCES
Paul Krugman
MEDIA
Economics U$A #16
EXERCISE
COFFEE SHOP |
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