Chapter 6
Dr. Merrill
Economics Department
Chapter 6
Supply Reduction: 1
Supply Reduction: 2
Supply Reduction: 3
Black Markets
Persistent Shortages
Rice Shortages
Persistent
Corn Surpluses
Price Controls
Minimum Wages
Equilibrium Changes
Sales Tax: 1
Sales Tax: 2
Illegal Drugs: 1
Illegal Drugs: 2
Role of Inventories
Inventories
Chapter 7
Market Demand
Budget Constraint: 1
Budget Constraint: 2
Preferences
Utility Declines
Total Utility
Consumer Equilibrium
Utility Predictions
Consumer Surplus: 1
Consumer Surplus: 2
Consumer Surplus: 3
Paradox of Value
Chapter 8
Consumption Choices
Price Changes
Income Changes
Utility Function
Indifference Curve
MRS
Perfect Substitutes
Perfect Complements
Maximizing Utility: 1
Maximizing Utility: 2
Maximizing Utility: 3
Maximizing Utility: 4
Demand Curve
Price Effect
Substitution Effect
Income Effect: 1
Income Effect: 2
Labor Supply: 1
Labor Supply: 2
Labor Supply: 3
Labor Supply: 4
Key Concepts
Chapter 9
Firms’ Problems
Principal-Agent Problem
Forms of Businesses
Business Finance
Future Value
Present Value: 1
Present Value: 2
Present Value: 3
Economic Cost
Cost of Capital
Economic Profit
“True Costs”
Why Firms?
Chapter 10
Profit Maximization
Time Frames
Cost Minimization
Isocost Line
Isocost Map
Isoquant
Isoquant Map
Least Cost: 1
Least Cost: 2
Total Product
Marginal Product
APX & MPX
Diminishing Returns
Total Cost
Average Cost
Total Cost Curves
Average Cost Curves
Cost Curve Shifts
Production Function
Returns to Scale
Long-Run AC
Economies of Scale
Long-Run Costs