Most Important Micro Graphs

Non-graph Concepts Comparative Advantage problems –Calculating opportunity costs –Calculating terms of trade Elasticity –Calculating price elasticity of demand –Calculating arc elasticity –Elastic, inelastic, unit elastic –Perfect elasticity, perfect inelasticity –Cross-elasticity In product market, MC = MR In factor market, MRP = MFC

Non-graph Concepts Perfect Competition –Define, and required conditions (price takers, etc.) –Finding profit or loss –Economic (Supernormal) vs. Accounting (Normal) profits –Shutdown price –Breakeven price Monopolies and Monopsonies –Define, required conditions Imperfect Competition –Monopolistic competition –Oligopoly

Non-graph Concepts Unions Business regulation Trade restrictions Income distribution and inequalities

Demand “Demand” v. “Quantity Demanded” Substitutes Complements Other Factors Price Elasticity of Demand Price Arc Elasticity of Demand Quantity Price D

Supply “Supply” v. “Quantity Supplied” What “supply curve means” Factor costs Supplier Substitutes # of Suppliers Price elasticity of supply Price arc elasticity of supply Quantity Price S

D & S Together How to graph: –Shortages –Surpluses –Price ceilings –Price floors ****Difference between “Demand” and “Quantity Demanded” ****If 2 curves shift, only one variable can be known

Elasticity and Ranges of Curve Quantity Price D Elastic Unit Elastic Inelastic

Failure to produce at equilibrium

Consumer and Supplier Surpluses

Maximizing Utility

Indifference Curves

Demand: Substitution and Income Effect

Total Product Curve

Total Costs, Total Fixed, Total Variable

Marginal Cost

All Cost Curves Together Know how the curves relate!

Long Run Cost Curve

Short-run Perfect Competition

Long-run Perfect Competition

Monopoly

Long-run Monopolistic Competition

Game Theory Matrix

Price Descrimination

Marginal Revenue Product

MRP = MFC

Supply of Labor

Monopsony

Tax Incidence

Market Failure: Social Costs

Market Failure: Social Benefits

Domestic Effect of Exports and Imports