Parkes' Economics for Business I Assignments, Fall 2013
[Andrew's SILC Home
Page, Shanghai, China] - [Drew's Home Page, United States]
Tentative Schedule and Course Assignments:
Nov. 5, 2013 Chapter 30: Money, Banking, and the Federal Reserve System and Chapter 31: Monetary Policy
Monetary Role of Banks
- What Banks Do
- The Problem of Bank Run
- The Required Reserve Ratio
Bank Regulation
Krugman's Chapter 30 PPT, 2nd Edition
Chapter 31: Monetary Theory
Opportunity Cost of Money - the "price" (interest rate)
Two Theories of Money Demand
- Liquidity Preference Theory (Money Demand depends upon the interest rate)
- Nominal versus Real Demand for Money
- Shifts in the Demand for Money Curve: Price Level changes, Technology and Income Changes
- Velocity Approach to Money Demand
- Quantity Equation
- Percentage Change Identity: %M + %V = %P + %Y
Krugman's Chapter 31 PPT - Second Edition
Nov. 7, 2013 Chapter 31: Monetary Policy
Monetary Policy and the interest rate
- Contractionary Monetary Policy
- Expansionary Monetary Policy
The Effects upon Aggregate Demand
Fighting a Recessionary Gap
Cooling an Inflationary Gap
Short Run versus Long Run Effects
Price level effect in the long run on Money Demand, interest rates return and higher costs decrease business firms' supply
Review
Review Terms, Definitions, and Other Things
Final Exam, Chapters 12 & 13, 22 - 24 and 27 - 31 on Tuesday, November 12, 2013
From 8:15 am to 10:15 am:
Classrooms 1131 and 1133
PAST ASSIGNMENTS:
Oct. 29, 2013 Chapter 28: Aggregate Supply and Aggregate Demand
- Chapter 27: Income and Expenditure
- Chapter 28: Aggregate Supply and Aggregate Demand
- Aggregate Supply Curve
- In the Short-Run slopes upward
- Wage contracts make wages "Sticky" causing the upward slope
- Shifts in AS
- Changes in Commodity Prices
- Changes in Nominal Wages
- Changes in Productivity
- In the Long Run Aggregate Supply is vertical - Called Potential Output
- From the short-run to the long-run
- wages change affecting business costs which affect suppliers and shift short-run AS
- The Aggregate Demand Curve
- Why the Aggregate Demand Slopes Downward
- Wealth Effect
- Interest Rate Effect
- Why the Aggregate Demand Curve Shifts
- Changes in Expectations
- Changes in Wealth
- Changes in the Stock of Physical Capital
- Changes in Government Policies - Monetary and Fiscal Policy
- Krugman's Chapter 28 PPT - 2nd Edition
Oct. 31, 2013 Chapter 29: Fiscal Policy
- Chapter 29: Fiscal Policy
- Taxes, Purchases, and Transfers
- The Government Budget and Total Spending
- Expansionary and Contractionary Policies
- Lags in Fiscal Policy!
2. Fiscal Policy and the Multiplier
- Government Spending versus Taxes and their Multiplier Effects
- How Much Bank for the Buck?
- Automatic Stabilizers
3. The Budget Balance
- Saving (Borrowing) by the Government
- Cyclically Adjusted Budget Balance
- Should the Budget be Balanced?
Federal Government's Budget Constraint PPT
4. Long-Run Implications of Fiscal Policy
- Deficits, Surpluses, and Debt
- Problems With the Rising Government Debt
- Deficits and Debt in Practice?
Government Spending and Taxation in 2010 in the U.S.A.
Krugman's Chapter 29 PPT, 2nd Edition
Week 8
Oct. 22, 2013 Chapter 23: Tracking the Economy and Chapter 24: Unemployment and Inflation
Oct. 24, 2013 Chapter 27: Income and Expenditure
Oct. 15, 2013 Chapter 13: Perfect Competition and the Supply Curve
- Homework Due: #5, p. 326 for 5 pts.
- Chapter 13: Perfect Competition and the Supply Curve
- Perfect Competition
- 4 Conditions & Assumptions for PC
- Optimal Output Rulee: MR = MC
- MR is the Price for Price Taking Firms
Short-Run VS. Long-Run
Profit and Loss in the Short-Run
The Shutdown Price and the Short-run Supply curve for the firm (min AVC)
Breakeven Price: Minimum ATC
The Industry Supply Curve
Entry and Exit - Long Run Market Equilibrium
Shifts in Demand and the 4 panel diagram
Perfect Competition with Increasing Cost Industry - 4 panel diagram homework answers
Krugman's Chapter 13 PPT - Second Edition
Oct. 17, 2013 Chapter 22: The Big Picture
- Chapter 22: The Big Picture
- Chapter 23: Tracking the Economy and Chapter 24: Unemployment and Inflation
Week 6
Oct. 8, 2013 Chapter 11: Consumer Preferences and Consumer Choice
- Chapter 11: Consumer Preferences and Consumer Choice
- Mapping the Utility Function
- The Consumption Bundle
- The Utility Function and Marginal Utility
- The Principle of Diminishing Marginal Utility
Budgets and Optimal Consumption
Budget Constraints and Budget Lines
Optimal Consumption Choice
Spending the Marginal Dollar
Marginal Utility per dollar
Optimal Consumption Rule
Quiz #8 Answers
Krugman's Chapter 11 PPT - Second Edition
Oct. 10, 2013 Finish Chapter 11 & Review
- From Utility to the Demand Curve
- The Substitution Effect
- The Income Effect
Review for the Midterm Exam
Chapters 1 - 7 and 9 - 11
Quiz #9 Answers
Oct. 11, 2013 Midterm Exam!
- Chapters 1 - 7 & 9 - 11, Friday 1:40 pm - 3:10 pm, Rooms 2111 & 2112
Oct. 12, 2013 Chapter 12: Inputs and Costs
- Chapter 12: Inputs and Costs
- The Production Function
- Fixed versus Variable Inputs
- Short run versus Long Run
- Total Product and Marginal Product Curves
Production to Cost Curves
Short Run Total, Average and Marginal Cost curves
Long Run AC and MC curves
Returns to Scale
Constant Returns to Scale
Increasing and Decreasing Returns to Scale
Krugman's Chapter 12 PPT - Second Edition
Week 5
Oct. 1, 2013 National Day Holiday!
- Enjoy the Holidays!
Week 4
Sept 24, 2013 Chapter 6: Elasticity continued and Chapter 7: Taxes
- Chapter 6: Elasticity
- Defining and Measuring Elasticity
- Calculating the Price Elasticity of Demand
- Midpoint Method
Interpreting the Price Elasticity of Demand, pp. 148-155.
How Elastic is Elastic?
Perfectly and Unit Elasticity
Total Revenue (Expenditures)
Price Effect and Quantity Effect
Price Elasticity Along the Demand Curve
What Factors Determine the Price Elasticity of Demand?
Other Demand Elasticities
Cross-Price Elasticity of Demand
Income Elasticity of Demand
Price Elasticity of Supply
Problem Set #2 and the Answer Key is
NOW here.
Quiz #6
Quiz #7 Question and Answer
Krugman's Chapter 6 PPT - Second Edition
Chapter 7: Taxes
A Preliminary View
The Effect of an Excise Tax on Quantities and Prices
Price Elasticities and Tax Incidence
Consumers or Producers incidence is higher?
The Benefits and Costs of Taxation
The Revenue from an Excise Tax
Tax Rates and Revenue
Laffer Curve
The Costs of Taxation
The Deadweight Loss (DWL) of a Tax
Elasticities and DWL
Krugman's Chapter 7 PPT - Second Edition
Sept 26, 2013 Chapter 9: Making Decisions and Chapter 10: The Rational Consumer
- Chapter 9: Making Decisions
- Opportunity Cost and Decisions
- Implicit and Explicit Cost
- Accounting and Economic Profit
- Marginal Decisions
- Marginal Cost
- Marginal Benefit
- Optimal Quantity and the Principal of Marginal Analysis
Sunk Costs
Krugman's Chapter 9 PPT - Second Edition
Chapter 10: The Rational Consumer
Utility: Getting Satisfaction
The Consumption Bundle
The Utility Function and Marginal Utility
The Principle of Diminishing Marginal Utility
Budgets and Optimal Consumption
Budget Constraints and Budget Lines
Optimal Consumption Choice
Spending the Marginal Dollar
Marginal Utility per dollar
Optimal Consumption Rule
From Utility to the Demand Curve
The Substitution Effect
The Income Effect
Krugman's Chapter 10 PPT - Second Edition
Week 3
Sept 17, 2013 Chapter 5: Price ceilings and floors
- Chapter 5: The Market Strikes Back
- Why Governments Control Prices
- Price Ceilings
- An Example
- Inefficiently low quantity
- Dead Weight Loss
- Winners, Losers, and Rent Control
- Inefficient Allocation to Consumers and Wasted Resources
- Inefficiently Low Quality and Black Markets
Price Floors
Minimum Wage
Inefficiently Allocations
Wasted Resources
Illegal Activity
Expectations
Controlling Quantities
Wedge between Supply Price and Demand Price
Costs of Quantity Controls
Quiz #5: Problem #2 on page #139. Understand the idea of a "Binding" constraint (when it has an effect and when there is no effect).
Problem Set #1 and the Answer Key are here.
Krugman's Chapter 5 PPT - Second Edition
Chapter 6: Elasticity
Defining and Measuring Elasticity
Calculating the Price Elasticity of Demand
Midpoint Method
Krugman's Chapter 6 PPT - Second Edition
Sept 19, 2013 Mid Autumn Festival Holiday
- Relax and enjoy the holiday
Week 2
Sept 10, 2013 Chapter 3: Supply and Demand
- Chapter 2a: Appendix on Math and Graphing - take notice you need to remember these concepts
- Chapter 3: Supply and Demand: A Competitive Market
- The Demand Curve
- The Law of Demand (Quantity Demanded versus Demand)
- Prices of Related Goods Substitutes and Complements)
- Income changes (Normal versus Inferior Goods)
- Tastes and Preferences
- Expectations
- Number in the Marketing Area
- The Supply Curve
- Quantity Supplied versus Supply Changes
- Input Prices
- Prices of related goods
- Technology
- Expectations
- Number of Suppliers
Equilibrium
Surpluses and Shortages
Shifts in the Curves
Quiz #3: Supply and Demand Shifts simultaneously
Krugman's Chapter 3 PPT - Second Edition
Sept 12, 2013 Chapter 4: Consumer and Producer Surplus
- Chapter 4: Consumer and Producer Surplus
- Consumer Surplus and the Demand Curve
- Willingness to Pay
- Area under the demand curve and above the price
- Change in Price, Change in Consumer Surplus
Producer Surplus and the Supply Curve
Cost and Producer Surplus
Area above the supply curve and below the price
Change in Price, Change in Producer Surplus
Gains from Trade and CS/PS
The Efficiency of Markets
Equity and Efficiency
Property Rights
Economic Signals
Inefficiencies
Market Failures
Quiz #4: Review CS and PS for Price Ceilings and Price Floors
Krugman's Chapter 4 PPT - Second Edition
Week 1
Sept 3, 2013 Chapter 1: Economy
- Chapter 1: First Principles
- Choices
- Resources
- Scarcity
- Trade-offs
- Marginal Analysis
- Incentives
How Economies Work
Interaction
Trade
Gains from Trade
Specialization
Equilibrium
Efficiency vs. Equity
Krugman's Chapter 1 PPT - Second Edition
Chapter 2: Economic Models: Trade-offs and Trade
Other Things Held Equal Assumption
A Model: Trade-Offs
Production Possibilities Frontier
Efficiency
Opportunity Cost
Economic Growth
Factors of Production
Technology
Sept 5, 2013 Chapter 2: Economic Models: Trade-offs and Trade
- Chapter 2: Economic Models: Trade-offs and Trade
- Other Things Held Equal Assumption
- A Model: Trade-Offs
- Production Possibilities Frontier
- Efficiency
- Opportunity Cost
- Economic Growth
- Factors of Production
- Technology
Comparative Advantage and Gains from Trade
Comparative Advantage
Absolute Advantage
Comparative Advantage and International Trade
Quiz #2: Problem #2 on page #42 (Click here for the Answers)
Transactions and the Circular Flow
Barter
Circular-Flow Diagram
Households and firms
Markets for Goods and Services
Factor Markets
Income Distribution
Positive versus Normative Economics
Krugman's Chapter 2 PPT - Second Edition
[Andrew's SILC Home Page, Shanghai, China] - [Drew's Home Page, United States]
email: andrew at andrewparkes.com
Last Update: November 10, 2013
By Andrew L. H. Parkes, Ph. D.