UNC-Chapel Hill ECON 101 - 8. September 11 (2 pages)

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8. September 11



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8. September 11

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2
School:
University of North Carolina at Chapel Hill
Course:
Econ 101 - Introduction to Economics

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Washburn 8 September 11 2014 Econ 101 Turchi o Price Elasticity o Eta negative change in Quantity over change in price times Price over quantity o Equal to negative percent change in quantity over percent change in price o Determinates of Price Elasticity o Number and proximity of substitutes o If no substitutes very low elasticity o Importance in consumer s budget o The higher importance in the budget the higher the demand elasticity o How narrowly the commodity is defined o The nature of the good o Necessities have low elasticity o Luxuries have high elasticity o The passage of Time o Given time to adjust people will find substitutes o Income Elasticity of Demand o Percent Change in Quantity over percent change in income o Equal to change in quantity over change in income times income over quantity o Normal goods When income rises demand rises o Inferior goods when income rises demand decreases o Cross price Elasticity of Demand o Percent change in Quantity A over percent change in price B o Equals change in quantity A over change in Price B times Price B over Quantity A o Eta supply change in Quantity S over quantity s All over change in price over price o Equals change in Quantity S over change in price times price over quantity S 2ND MIDTERM o Definition of Profits o Total revenue Total cost o Value of output minus value of factors of production o Includes opportunity cost o Goals are to maximize profits o Factors of production o Land o Labor o Capital o produced means of production o Modern production can make more outputs with less inputs than traditional production o Reduction of labor costs o Technical Efficiency Washburn o Economic Efficiency o Finding the cheapest way among technically efficient ways to produce output o Total Cost o Direct Costs Implicit costs o Equal to total opportunity cost o Direct Cost o Labor cost materials o Implicit Cost o Opportunity cost of the next best thing not done



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