2018-08-11 15:25 小马过河
摘要： 今天，三立为AP考生们搜集整理了关于AP微观经济学MarketsPrices（三），值得借鉴。 Chapter 2 Ma rkets and Prices 6 . Consumer Surplus and Producer Surplus 6.1 Consumer surplus, producer surplus Consumer surplus: A buyer's willingness to pay minus the amount of buyer actually pays. Producer surplus: the amount a seller is paid for a good minus the seller's cost. Total Surplus: the sum of consumer and producer surplus -
Markets and Prices
6. Consumer Surplus and Producer Surplus
6.1 Consumer surplus, producer surplus
Consumer surplus: A buyer's willingness to pay minus the amount of buyer actually pays.
Producer surplus: the amount a seller is paid for a good minus the seller's cost.
Total Surplus: the sum of consumer and producer surplus - is the area between the supply and demand curves up to the equilibrium quantity.
Deadweight loss: When the government imposes a tax on a good, the quantity sold falls from Q1 to Q2. As a result, some of the potential gains from trade among buyers and sellers do not get realized. These lost gains from trade create the deadweight loss.
Is a measure of how much buyers and sellers respond to changes in market conditions.
Allows us to analyze supply and demand with greater precision.
7.1 Price elasticity of demand
Price elasticity of demand (sometimes simply called price elasticity) measures how much the quantity demanded of a good changes when its price changes.
The price elasticity of demand is computed as:
Note: use absolute values and ignore the negative sign
7.2 Interpretation of Ed
Ed>1: Elastic Demand - % Quantity demanded responds strongly to changes in price.
Ed<1: Inelastic Demand - % Quantity demanded does not respond strongly to price changes. Ed=1: Unit Elastic - % Quantity demanded changes by the same percentage as the price. Ed=0: Perfectly Inelastic - % Quantity demanded does not respond to price changes at all. Ed=∞: Perfectly Elastic - % Quantity demanded changes infinitely with any change in price.
7.3 Determinants of price elasticity of demand
Demand tends to be more elastic ...
If the good is a luxury
The longer the time period
The larger the number of close substitutes
If the good represents a larger share of consumer's budgets
Demand tends to be more inelastic ...
If the good is a necessity
The shorter the time period
The fewer the number of close substitutes
If the good represents a smaller share of consumer's budgets
7.4 Elasticity Varies with Price Range
More elastic toward top left; less elastic at lower right
Note: Slope does not measure elasticity - slope measures absolute changes; elasticity measures relative changes.
7.5 Total Revenue Test for Elasticity
Total revenue is the amount the seller receives from the buyer from the sale of a product;
If demand is elastic, then a decrease in price will increase total revenue; an increase in price will decrease total revenue.
If demand is inelastic, then a decrease in price will reduce total revenue; an increase in price will increase total revenue.
If demand is unit elastic, any change in price will leave total revenue unchanged.
7.6 Cross Elasticity
Cross-price elasticity of demand measures how responsive the demand for one good is to changes in the price of another good.
The Cross Elasticity Coefficient Exy is calculated:
If Exy is positive, then X and Y are substitute goods.
If Exy is negative, then X and Y are complementary goods.
If Exy is zero, then X and Y are independent goods.
7.7 Income Elasticity
Income elasticity of demand measures how the demand for a good changes in response to changes in income.
Income Elasticity Coefficient
For most goods, changes in income and changes in quantity purchased on directly related such that the coefficient has a value greater than zero. We call these goods "normal goods."
In other instances, people purchase less of some goods as their incomes increase. These are called "inferior goods" and they have anegative coefficient.
8. Government-controlled prices
Government may set a price and it may differ from the equilibrium price that the market sets. As a result, a shortage (as in the case of a price that is below equilibrium) or a surplus (as in the case of a price that is above equilibrium) will happen.
8.1 Price Ceilings
A maximum legal price below the equilibrium price
Examples: essential goods, rent controls, interest rates, price controls
Solutions: Black markets (underground markets)
8.2 Price Floors
A minimum legal price above equilibrium price
Creates surplus since the amount supplied is greater than the amount demanded
Markets and Prices
is the amount that sellers are willing and able to sell at a particular price.
Supply as the amount of goods and services that businesses are willing and ability to
produce at different prices during a certain period of time. Supply is a record of how business's production habits change in response to price. It is a whole series of quantities that businesses will offer at the different prices levels.
Hence, a supply schedule:
4.1 Law of supply
As the price goes down, quantity supplied offered decreases.
From a business perspective, profit-seeking activities by businesses are logical. Hence, sellers will pull back from a market where prices are low. This direct relationship is called the law of upward-sloping supply.
4.2 Changes in quantity supplied
Movement along the same supply curve caused by a change in Price!
4.3 Change in supply
is a shift in the supply curve, either to left or to right. It is caused by a change in a determinant
4.4 Determinants of supply
R - Resource Price: most important and most typical reason for change
O - The price of other goods (Prices of goods that use same resources): If the price of one production substitute rises, the supply of another substitute will decrease in order to increase profits.
T - Technology: new innovations in technology can reduce the average cost of production, thus increase supply.
T - Taxes and subsidies: taxes increase costs; subsidies lower costs.
E - Producer expectations: If suppliers expect price to rise, they will wait to send their goods to market. Because the price is as yet unchanged, this is a decrease in supply, which would in turn cause price to rise. If suppliers expect price to fall, they will rush their goods to market in hopes of getting the present high price. This increases supply, which would cause price to fall.
N - The number of sellers: Other things equal, the larger the number of suppliers, the greater the market supply.
The prices at which both demand and supply curves intersect is the equilibrium price.
A market equilibrium comes at the price at which quantity demanded equals quantity supplied.If the market price is below equilibrium, the individual decisions of buyers and sellers will eventually push it upward. If the market price is above equilibrium, the opposite will tend to happen.
Depending on market conditions, immediately or in the future, price and quantity will move toward equilibrium as buyers and sellers intuitively and logically carry out the laws of demand and supply.
5.1 Changes in Supply, Demand and Equilibrium:
Demand only changes
Supply only Changes
Change in SupplyChange in DemandEffect on PeEffect on Qe