ZOMG MICRO ECONOMICS WTFFFF

[whoisthedrizzle]

My dick is perfectly elastic. Wait. What?

[qdmcg]

its helpful to remember that supply/demand curves are completely independent of one another. i remember lots of questions relating to one of the curves being effected, and trying to see if students understand that the other is not changed, ie:

the materials required to produce pencils have become much more expensive, what happens to the demand of pencils?

well the demand doesn't change. people still want to buy y pencils for x dollars. the supply curve changes, which effects the equilibrium price and number of pencils sold, but it doesn't have any effect on the demand curve for pencils.


this is probably pretty basic for you but it was definitely on a few of my micro exams

[NT!]

that sounds like something this tricky bitch would ask. the demand curve doesn't change but the quantity demanded does.

she is really mean btw, every time i ask her a question she thinks i'm making fun of her

[wdead]

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land is perfectly inelastic. E=100000000000000000000, because no matter what the price change, there will be no change in quantity consumed.

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Wait. What?

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The supply of land is finite and non changing. Even if
price of land is one dollar, more cannot be produced. Lots of people will want it, and there will be a land shortage, so price will eventually go up (this is why manhattan real estate prices are so high).
If land is expensive, no one will want it, but the quantity of land does not change.

Obviously, ice cream is not like this. If lots of people want to buy ice cream, we can just make more of it, so total quantity of ice cream is very dependent on its price. For land, this is not the case.

I should not have said quantity consumed, that was wrong. What I meant was simply changes in prices of land will not lead to changes in quantity of land SUUPLIED, where as with most things: wine, cars, clothes, etc, have normal price elasticities, where if everyone wants jeans and they arent enough of them, someone will produce more.

ALso, I have only really talked about Supply Elasticities. Elasticities can also refer to demand.

ALSO, elasticity is percent change in Q over percent change in P, not what i wrote earlier. I always mix that up for some reason

[Borodog]

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land is perfectly inelastic. E=100000000000000000000, because no matter what the price change, there will be no change in quantity consumed.

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Wait. What?

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<font color="#666666"> The supply of land is finite and non changing. Even</font> if price of land is one dollar, <font color="#666666">more cannot be produced.</font> Lots of people will want it, <font color="#666666">and there will be a land shortage, so price will eventually go up (this is why manhattan real estate prices are so high).</font>
If land is expensive, no one will want it, <font color="#666666">but the quantity of land does not change.</font>


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I do not think that word, "perfectly inelastic", means what you think it means.

[wdead]

Boro,
When people talk about price elasticities they talk about how quantity demanded/supplied responds to changes in price. I realize my examples are kinda whack, as they do not reflect price CHANGES, which is what I meant to talk about. Whether P starts at one or 10000 doesnt really matter, what matters is how changes in consumption/production respond to price CHANGES.

Sorry I didnt make that clearer, its been awhile.

[Money2Burn]

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The supply of land is finite and non changing. Even if
price of land is one dollar, more cannot be produced.

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I think Dubai might disagree with this statement.

[Karak567]

im an econ major

cool stuff, huh?

[ItalianFX]

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hi bbv,

i have an allegedly difficult midterm on this topic tomorrow.

i would appreciate your thoughts on:

supply and demand
elasticity
aggregate demand curves
social surplus &amp; dead weight loss
intertemporal consumption models
why i am not 'cramming' (LOL) for this with hot chicks

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Supply and Demand:

Demand is how much consumers are willing to buy. As price goes up, quantity demanded goes down - downward sloping.

Supply is how much producers are willing to sell. As price goes up, quantity supplied goes up - upward sloping

Equilibrium is where S = D, and you get equilibrium price and quantity. Analysis is performed based on demand or supply shocks and that is where you get changing prices and changing quantities.

Elasticity:

There are several forms, but the easiest is price elasticity of demand = % change in quantity demanded / $ change in price. Elasticity can get complex, so you may want to look into that on your own.

Aggregate demand curves:

sum total of all planned expenditures in the economy. These are close to other demand curves, but hold alot more in them based on your analysis.

Social Surplus &amp; Dead Weight Loss:

Not sure what social surplus is, but it sounds like it could be related to consumer surplus.

Dead Weight Loss comes from monopolies where they try to maximize profits, but they restrict output.

Intertemporal Consumption Models:

This is based on when you decide what to do with your income, you can consume all now or save part for the future.
You have 2 time periods, 1 and 2. You have consumption, C1 and C2, Income M1 and M2 and interest r In Period 1, you can use your entire income for consumption C1. So your C1 = M1 + M2/(1+r). Or you can save all of your income until period 2 and have C2 = M2 + M1(1+r). The closer you are to C2, the more patient you are and the closer to C1, the more impatient.

[Karak567]

you know it's sad when i would rather take your micro mid-term tomorrow than sit here and do all the regression analysis on this panel data project im working on in SAS right now