microeconomics Preliminaries参考.ppt

CHAPTER 2 OUTLINE 2.1 Supply and Demand 2.2 The Market Mechanism 2.3 Changes in Market Equilibrium 2.4 Elasticities of Supply and Demand 2.5 Short-Run versus Long-Run Elasticities 2.6 Understanding and Predicting the Effects of Changing Market Conditions 2.7 Effects of Government Intervention The Basics of Supply and Demand Understanding and predicting how changing world economic conditions affect market price and production Evaluating the impact of government price controls, minimum wages, price supports, and production incentives Determining how taxes, subsidies, tariffs, and import quotas affect consumers and producers Supply-demand analysis is a fundamental and powerful tool that can be applied to a wide variety of interesting and important problems. To name a few: SUPPLY AND DEMAND 2.1 The Supply Curve ● supply curve Relationship between the quantity of a good that producers are willing to sell and the price of the good. The Supply Curve The supply curve, labeled S in the figure, shows how the quantity of a good offered for sale changes as the price of the good changes. The supply curve is upward sloping: The higher the price, the more firms are able and willing to produce and sell. If production costs fall, firms can produce the same quantity at a lower price or a larger quantity at the same price. The supply curve then shifts to the right (from S to S’). Figure 2.1 SUPPLY AND DEMAND 2.1 The Supply Curve Other Variables That Affect Supply The quantity supplied can depend on other variables besides price. For example: The quantity that producers are willing to sell depends not only on the price they receive but also on their production costs, including wages, interest charges, and the costs of raw materials. When production costs decrease, output increases no matter what the market price happens to be. The entire supply curve thus shifts to the right. Economists often use the phrase change in supply to refer to shifts in the supply curve, while rese