5第五章弹性及其应.ppt

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5第五章弹性及其应

* Here, Qd and Qs are short for quantity demanded and quantity supplied, as in the PowerPoint for Chapter 4. * It might be worth explaining to your students that “P and Q move in opposite directions” means that the percentage change in Q and the percentage change in P will have opposite signs, thus implying a negative price elasticity. To be consistent with the text, the last statement in the green box says that we will report all price elasticities as positive numbers. It might be slightly more accurate to say that we will report all elasticities as non-negative numbers: we want to allow for the (admittedly rare) case of zero elasticity. * These calculations are based on the example shown a few slides back: points A and B on the website demand curve. * In essence, the textbook says “Here are the determinants of elasticity. The first one is availability of close substitutes. Here’s an example….” That’s great for a textbook. For teaching, I’ve found a different approach to be far more effective: having students deduce the general lessons from specific examples they can figure out using common sense. This is the approach on the next few slides. Also, see notes on the next slide for a good suggestion. * Suggestion: For each of these examples, display the slide title (which lists the two goods) and the first two lines of text (which ask which good experiences the biggest drop in demand in response to a 20% price increase). Give your students a quiet minute to formulate their answers. Then, ask for volunteers. * You might need to clarify the nature of this thought experiment. Here, we look at two alternate scenarios. In the first, the price of blue jeans (and no other clothing) rises by 20%, and we observe the percentage decrease in quantity of blue jeans demanded. In the second scenario, the price of all clothing rises by 20%, and we observe the percentage decrease in demand for all clothing. * This slide is a convenience for your st

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