ECON 1101 1nd Edition Lecture 26 Outline of Last Lecture II Short Run Supply Curve of Firm III Long Run Supply Curve of Firm IV Long Run Supply Curve of Industry V Short Run Supply Curve of Competitive Industry Outline of Current Lecture VI More on firms VII Broader Applications VIII Return of Manufacturing to US IX Broader Application on Consumer Theory in Social Sciences X Food Stamps Current Lecture Economic profit NOT the same as accounting profit Economic profit measures opportunity cost as well EX 100 000 burger stand 90 000 hotdog stand burger stand 10 000 economic profit 0 economic profit can t go anywhere and make more cant make less Supply in long run is ALWAYS flat will ALWAYS return to MR Assume same technology available for all no barriers to enter Input prices to industry do not go up as industry expands Concluded long run supply perfectly elastic P minATC short run fixed firms long run firms can enter leave freely firms will enter as long as there is profit China has lower cost US leaves market because they have loss Comparative advantage WEKEST in custom element These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Custom more available locally high end products in the USA but China is moving up the quality ladder Minneapolis the new North Carolina Return of manufacturing in the US Why a problem Not enough workers Rational Choice Theory of Crime Rational agents solving maximization problems sociology rational choice theory Incentive to commit a crime 1 honest work hour 2 dishonest work hour eg Drug dealer Cash instead of food stamps Income 36 P pizza 4 P beer 2 Pizza stamps 3 pizza 12 Beer 6 pizza With cash you can do WHATEVER he wanted COULD buy more beer higher IC cash pareto improvement
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