MID Year Graphs You should know and be able to draw, explain and label all parts.

Basic S&D ideas Price Quantity Demand

Basic S&D ideas Price Quantity Elastic Demand is more flat and Greater than 1

Basic S&D ideas Price Quantity Inelastic Demand is a steep Line = less than 1

Basic S&D ideas Price Quantity Perfectly Inelastic Demand

Basic S&D ideas Price Quantity Perfectly elastic Demand

Basic S&D ideas Price Quantity Demand A BChange in demand

Basic S&D ideas Price Quantity Supply

Basic S&D ideas Price Quantity Inelastic Supply is steep

Basic S&D ideas Price Quantity Elastic Supply is flatter

Basic S&D ideas Price Quantity Perfectly inelastic Supply

Basic S&D ideas Price Quantity Perfectly elastic Supply

Basic S&D ideas Price Quantity Supply A B Change in supply

Basic S&D ideas Price Quantity D S Equilibrium – market clearing point

Basic S&D ideas Price Quantity D S Equilibrium – market clearing point Price Ceiling

Basic S&D ideas Price Quantity D S Equilibrium – market clearing point Price Floor

Basic S&D ideas Price Quantity D S E D2 Shift in demand - determinants

Basic S&D ideas Price Quantity D S E S2 Shift in supply - determinants

Basic S&D ideas Price Quantity D S E S2 Double Shift: Shift in supply and demand Increase in income and lowering of costs of production D2

Surplus – Consumer and Supplier Price Quantity D S Equilibrium – market clearing point CS PS CS = above equilibrium price below the demand curve PS = below the equilibrium price and above the supply curve TS = CS+PS

Changing CS and PS Price Quantity S D

Changing CS and PS Price Quantity S D A recession cuts income D2 E2 A B C D

Externality – Negative (-) Price Quantity D – Private Value S – Private Cost E S2 O O – social cost of pollution 3 rd parties wishes Social Cost

Positive externality (+) Price Quantity S – Private Cost D D2- Social Value O = benefit to society O= positive of education 3 rd parties benefits Private Values