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College of Administrative and Financial Sciences
Deadline: End of Week 3 (23/7/2022)
Assignment 1
Course Name: Microeconomics
Studentâ€™s Name:
Course Code: ECON101
Studentâ€™s ID Number:
Semester: Summer
CRN:
For Instructorâ€™s Use only
Instructorâ€™s Name:
Level of Marks: High/Middle/Low
â– This assignment is an individual assignment.
â– The due date for Assignment 1 is by the end of Week 3 (23/7/2022).
â– The Assignment must be submitted only in WORD format via the allocated
folder.
â– Assignments submitted through email will not be accepted.
â– Students are advised to make their work clear and well presented. This also
includes filling in your information on the cover page.
â– Students must mention question numbers clearly in their answers.
â– Late submitted assignments will NOT be entertained.
â– Avoid plagiarism; the work should be in your own words; copying from students
or other resources without proper referencing will result in ZERO marks. No
exceptions.
â– All answered must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions:
(Marks: 15)
Q2. Maps are a good non-economic example of using assumptions to make things simpler.
Which of the following are assumptions used to make maps useful?
(2 Marks) [Ch. 1]
Q3. Consider a student studying for a biology exam. Would you expect study time to be
subject to diminishing returns? Suppose productivity is measured as the anticipated increase
in the exam score. Construct a numerical example in which the first hour is twice as
productive as the second hour, which is twice as productive as the third hour, and so on up to
five hours of study. (2 Marks) [Ch. 2]
Q5. If the demand and supply curves for boxes are: D = 100 – 8P and S = 22 + 4P, where
P is the price of boxes.
a. Does the law of supply apply for the market of boxes? Why? (3 Marks)
b. Calculate the equilibrium quantity and price? (2 Marks)
[Ch. 3]
Survey of Economics: Principles,
Applications and Tools
Eighth Edition
https://www.pearson.com/mylab
Course ID: chakroun54908
Survey of Economics: Principles,
Applications and Tools
Eighth Edition
Chapter 1
Introduction: What Is
Economics
?
Chapter Outline
1.1 What Is Economics?
1.2 The three economic questions: What, How and Who?
1.3 The Economic Way of Thinking
1.4 Microeconomics Verus Macroeconomics
1.1 What Is Economicsâ€« Ù…Ø§ Ù‡Ùˆ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ØŸâ€¬1.1
?
Economics: The study of choices when there is scarcity.
Scarcity: The resources we use to produce goods and
services are limited.
â€¢ You have a limited amount of time. Each hour on the job means one less hour
â€¢ A city has a limited amount of land. If the city uses an acre of land for a park, it
has one less acre for housing, retailers, or industry
â€¢ You have limited income this year. If you spend \$17 on a music CD, thatâ€™s \$17
less you have to spend on other products or to save.
â€¢
â€« Ø¯ÙˆØ§Ù„Ø±Ø§ Ø¹Ù„Ù‰ Ø§Ù„Ù…ÙˆØ³ÙŠÙ‚Ù‰ Ø¬ÙŠÙ…â€¬17 â€« Ø¥Ø°Ø§ ÙƒÙ†Øª ØªÙ†ÙÙ‚â€¬.â€«Ù„Ø¯ÙŠÙƒ Ø¯Ø®Ù„ Ù…Ø­Ø¯ÙˆØ¯ Ù‡Ø°Ø§ Ø§Ù„Ø¹Ø§Ù…â€¬D â€« Ø¯ÙˆØ§Ù„Ø±Ø§ Ø£Ù‚Ù„ Ù„Ø¯ÙŠÙƒâ€¬17 â€« ÙˆÙ‡Ø°Ø§ Ù‡Ùˆâ€¬ØŒ
.â€«Ù„Ù‚Ø¶Ø§Ø¡ Ø¹Ù„Ù‰ ØºÙŠØ±Ù‡Ø§ Ù…Ù† Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª Ø£Ùˆ Ø§Ù„Ù†Ù‚Ø§Ø°â€¬
â€¢
The Five Factors of Production (1 of 2) )2 â€« Ù…Ù†â€¬1( â€«Ø§Ù„Ø¹ÙˆØ§Ù…Ù„ Ø§Ù„Ø®Ù…Ø³Ø© Ù„Ø¥Ù„Ù†ØªØ§Ø¬â€¬
Factors of Production: The resources used to produce goods and services;
also known as production inputs or resources.
.â€« Ø§Ù„Ù…ÙˆØ§Ø±Ø¯ Ø§Ù„Ù…Ø³ØªØ®Ø¯Ù…Ø© Ø¥Ù„Ù†ØªØ§Ø¬ Ø§Ù„Ø³Ù„Ø¹ ÙˆØ§Ù„Ø®Ø¯Ù…Ø§ØªØ› Ø§Ù„Ù…Ø¹Ø±ÙˆÙ Ø£ÙŠØ¶Ø§ Ø¨Ø§Ø³Ù… Ù…Ø¯Ø®Ø§Ù„Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬ Ø£Ùˆ Ø§Ù„Ù…ÙˆØ§Ø±Ø¯â€¬:â€«Ø¹ÙˆØ§Ù…Ù„ Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
Natural Resources: Resources provided by nature and used to produce goods
and services.
Labor: Human effort, including both physical and mental, used to produce goods
and services.
â€« ÙŠØ³ØªØ®Ø¯Ù… Ø¥Ù„Ù†ØªØ§Ø¬ Ø§Ù„Ø³Ù„Ø¹ ÙˆØ§Ù„Ø®Ø¯Ù…Ø§Øªâ€¬ØŒâ€« Ø¨Ù…Ø§ ÙÙŠ Ø°Ù„Ùƒ Ø§Ù„Ø¨Ø¯Ù†ÙŠ ÙˆØ§Ù„Ø¹Ù‚Ù„ÙŠ Ø¹Ù„Ù‰ Ø­Ø¯ Ø³ÙˆØ§Ø¡â€¬ØŒâ€« Ø§Ù„Ø¬Ù‡Ø¯ Ø§Ù„Ø¨Ø´Ø±ÙŠâ€¬:â€«Ø§Ù„Ø¹Ù…Ù„â€¬
The Five Factors of Production (2 of 2) )2 â€« Ù…Ù†â€¬2( â€«Ø§Ù„Ø¹ÙˆØ§Ù…Ù„ Ø§Ù„Ø®Ù…Ø³Ø© Ù„Ø¥Ù„Ù†ØªØ§Ø¬â€¬
Physical Capital: The stock of equipment, machines, structures, and
infrastructure that is used to produce goods and services.
Human Capital: The knowledge and skills acquired by a worker through
education and experience and used to produce goods and services.
â€« ÙˆÙŠØ³ØªØ®Ø¯Ù… Ø¥Ù„Ù†ØªØ§Ø¬ Ø§Ù„Ø³Ù„Ø¹â€¬ØŒâ€« Ø§Ù„Ù…Ø¹Ø§Ø±Ù ÙˆØ§Ù„Ù…Ù‡Ø§Ø±Ø§Øª Ø§Ù„ØªÙŠ ÙŠÙƒØªØ³Ø¨Ù‡Ø§ Ø§Ù„Ø¹Ø§Ù…Ù„ Ù…Ù† Ø®Ø§Ù„Ù„ Ø§Ù„ØªØ¹Ù„ÙŠÙ… ÙˆØ§Ù„Ø®Ø¨Ø±Ø©â€¬:â€«Ø±Ø£Ø³ Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ø¨Ø´Ø±ÙŠâ€¬
.â€«ÙˆØ§Ù„Ø®Ø¯Ù…Ø§Øªâ€¬
Entrepreneurship: The effort used to coordinate the factors of productionâ€”
natural resources, labor, physical capital, and human capitalâ€”to produce and sell
products.
â€« ÙˆØ±Ø£Ø³ Ø§Ù„Ù…Ø§Ù„â€¬ØŒâ€« ÙˆØ±Ø£Ø³ Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ù…Ø§Ø¯ÙŠâ€¬ØŒâ€« ÙˆØ§Ù„Ø¹Ù…Ù„â€¬ØŒâ€« Ø§Ù„Ù…ÙˆØ§Ø±Ø¯ Ø§Ù„Ø·Ø¨ÙŠØ¹ÙŠØ©â€¬- â€« Ø§Ù„Ø¬Ù‡Ø¯ Ø§Ù„Ù…Ø¨Ø°ÙˆÙ„ Ù„ØªÙ†Ø³ÙŠÙ‚ Ø¹ÙˆØ§Ù…Ù„ Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬:â€«Ø±ÙŠØ§Ø¯Ø© Ø§Ø£Ù„Ø¹Ù…Ø§Ù„â€¬
â€« Ø¥Ù„Ù†ØªØ§Ø¬ Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª ÙˆØ¨ÙŠØ¹Ù‡Ø§â€¬- â€«Ø§Ù„Ø¨Ø´Ø±ÙŠâ€¬
1.2 The Three Key Economic Questions: What, How, and
The choices made by individuals, firms, and governments
1. What products do we produce?
2. How do we produce the products?
3. Who consumes the products?
â€«ÙˆØ§Ù„Ø®ÙŠØ§Ø±Ø§Øª Ø§Ù„ØªÙŠ ÙŠØªØ®Ø°Ù‡Ø§ Ø§Ø£Ù„ÙØ±Ø§Ø¯ ÙˆØ§Ù„Ø´Ø±ÙƒØ§Øª ÙˆØ§Ù„Ø­ÙƒÙˆÙ…Ø§Øª ØªØ¬ÙŠØ¨ Ø¹Ù„Ù‰â€¬
â€«Ù…Ø§ Ù‡ÙŠ Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª Ø§Ù„ØªÙŠ Ù†Ù†ØªØ¬Ù‡Ø§ØŸâ€¬
â€«ÙƒÙŠÙ Ù†Ù†ØªØ¬ Ø§Ù„Ù…Ù†ØªØ¬Ø§ØªØŸâ€¬
â€«Ù…Ù† ÙŠØ³ØªÙ‡Ù„Ùƒ Ø§Ù„Ù…Ù†ØªØ¬Ø§ØªØŸâ€¬
Economists use economic models to explore the choices
people make and the consequences of those choices.
â€«ÙˆÙŠØ³ØªØ®Ø¯Ù… Ø®Ø¨Ø±Ø§Ø¡ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ù†Ù…Ø§Ø°Ø¬ Ø§Ù‚ØªØµØ§Ø¯ÙŠØ© Ø§Ù„Ø³ØªÙƒØ´Ø§Ù Ø§Ù„Ø®ÙŠØ§Ø±Ø§Øª Ø§Ù„ØªÙŠ ÙŠØªØ®Ø°Ù‡Ø§ Ø§Ù„Ù†Ø§Ø³â€¬
Economic model: A simplified representation of an
economic environment, often employing a graph.
.Ù‹ â€« ÙˆØºØ§Ù„Ø¨Ø§ Ù‹ Ù…Ø§ ÙŠØ³ØªØ®Ø¯Ù… Ø±Ø³Ù…Ø§ Ù‹ Ø¨ÙŠØ§Ù†ÙŠØ§â€¬ØŒâ€« ØªÙ…Ø«ÙŠÙ„ Ù…Ø¨Ø³Ø· Ù„Ù„Ø¨ÙŠØ¦Ø© Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠØ©â€¬:â€«Ø§Ù„Ù†Ù…ÙˆØ°Ø¬ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠâ€¬
Positive versus Normative Analysisâ€«Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø¥Ù„ÙŠØ¬Ø§Ø¨ÙŠ Ù…Ù‚Ø§Ø¨Ù„ Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ù„Ù…Ø¹ÙŠØ§Ø±ÙŠâ€¬
Most modern economics is based on positive analysis:
:â€«ÙˆÙŠØ³ØªÙ†Ø¯ Ù…Ø¹Ø¸Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø­Ø¯ÙŠØ« Ø¹Ù„Ù‰ Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø¥Ù„ÙŠØ¬Ø§Ø¨ÙŠâ€¬
Positive Analysis: Answers the question â€œWhat is?â€ or â€œWhat will be?â€
“â€« ÙŠØ¬ÙŠØ¨ Ø¹Ù„Ù‰ Ø§Ù„Ø³Ø¤Ø§Ù„ “Ù…Ø§ Ù‡ÙˆØŸ” Ø£Ùˆ “Ù…Ø§Ø°Ø§ Ø³ÙŠÙƒÙˆÙ†ØŸâ€¬:â€«ØªØ­Ù„ÙŠÙ„ Ø¥ÙŠØ¬Ø§Ø¨ÙŠâ€¬
A second type of economic reasoning is normative in nature:
Normative Analysis: Answers the question â€œWhat ought to be?â€
“â€« ÙŠØ¬ÙŠØ¨ Ø¹Ù„Ù‰ Ø§Ù„Ø³Ø¤Ø§Ù„ “Ù…Ø§Ø°Ø§ ÙŠØ¬Ø¨ Ø£Ù† ÙŠÙƒÙˆÙ†ØŸâ€¬:â€«Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ù„Ù…Ø¹ÙŠØ§Ø±ÙŠâ€¬
Table 1.1 Comparing Positive and Normative Questions
Positive Questions
Normative Questions
â€¢ If the government increases the
minimum wage, how many workers
will lose their jobs?
â€¢ Should the government
increase the minimum wage?
â€¢ If two office-supply firms merge, will
the price of office supplies increase?
â€¢ Should the government block
the merger of two office-supply
firms?
â€¢ How does a college education affect â€¢ Should the government
a personâ€™s productivity and earnings?
subsidize a college education?
â€¢ How do consumers respond to a cut
in income taxes?
â€¢ Should the government cut
taxes to stimulate the
economy?
â€¢ If a nation restricts shoe imports, who â€¢ Should the government restrict
imports?
benefits and who bears the cost?
Positive Questions
â€¢ If the government increases the
minimum wage, how many workers
will lose their jobs?
â€¢ If two office-supply firms merge, will
the price of office supplies increase?
â€¢ How does a college education affect
a personâ€™s productivity and earnings?
â€¢ How do consumers respond to a cut
in income taxes?
â€¢ If a nation restricts shoe imports, who
benefits and who bears the cost?
â€« ÙƒÙ…â€¬ØŒâ€«Ø¥Ø°Ø§ Ø²Ø§Ø¯Øª Ø§Ù„Ø­ÙƒÙˆÙ…Ø© Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ±â€¬
â€«Ø¹Ø¯Ø¯ Ø§Ù„Ø¹Ù…Ø§Ù„ Ø§Ù„Ø°ÙŠÙ† Ø³ÙŠÙÙ‚Ø¯ÙˆÙ† ÙˆØ¸Ø§Ø¦ÙÙ‡Ù…ØŸâ€¬
â€« Ù‡Ù„â€¬ØŒâ€«Ø¥Ø°Ø§ Ø¯Ù…Ø¬Øª Ø´Ø±ÙƒØªØ§Ù† Ø¥Ù„Ù…Ø¯Ø§Ø¯Ø§Øª Ø§Ù„Ù…ÙƒØ§ØªØ¨â€¬
â€«ÙƒÙŠÙ ÙŠØ¤Ø«Ø± Ø§Ù„ØªØ¹Ù„ÙŠÙ… Ø§Ù„Ø¬Ø§Ù…Ø¹ÙŠ Ø¹Ù„Ù‰ Ø¥Ù†ØªØ§Ø¬ÙŠØ©â€¬
â€«Ø§Ù„Ø´Ø®Øµ ÙˆÙ…ÙƒØªØ³Ø¨Ù‡ØŸâ€¬
â€«ÙƒÙŠÙ ÙŠØ³ØªØ¬ÙŠØ¨ Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙˆÙ† Ù„Ø®ÙØ¶â€¬
â€«Ø§Ù„Ø¶Ø±Ø§Ø¦Ø¨ Ø¹Ù„Ù‰ Ø§Ù„Ø¯Ø®Ù„ØŸâ€¬
Normative Questions
â€¢ Should the government
increase the minimum wage?
â€¢ Should the government block
the merger of two office-supply
firms?
â€¢ Should the government
subsidize a college education?
â€¢ Should the government cut
taxes to stimulate the
economy?
â€«Ù‡Ù„ ÙŠÙ†Ø¨ØºÙŠ Ù„Ù„Ø­ÙƒÙˆÙ…Ø© Ø£Ù† ØªÙ…Ù†Ø¹ Ø§Ù†Ø¯Ù…Ø§Ø¬ Ø´Ø±ÙƒØªÙŠÙ† Ù„ØªÙˆØ±ÙŠØ¯â€¬
â€«Ø§Ù„Ù…ÙƒØ§ØªØ¨ØŸâ€¬
â€«Ù‡Ù„ ÙŠÙ†Ø¨ØºÙŠ Ù„Ù„Ø­ÙƒÙˆÙ…Ø© Ø£Ù† ØªØ¯Ø¹Ù… Ø§Ù„ØªØ¹Ù„ÙŠÙ… Ø§Ù„Ø¬Ø§Ù…Ø¹ÙŠØŸâ€¬
â€«Ù‡Ù„ ÙŠÙ†Ø¨ØºÙŠ Ù„Ù„Ø­ÙƒÙˆÙ…Ø© Ø£Ù† ØªØ®ÙØ¶ Ø§Ù„Ø¶Ø±Ø§Ø¦Ø¨ Ù„ØªØ­ÙÙŠØ² Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ØŸâ€¬
â€«Ù‡Ù„ ÙŠØ¬Ø¨ Ø¹Ù„Ù‰ Ø§Ù„Ø­ÙƒÙˆÙ…Ø© Ø£Ù† ØªÙ‚ÙŠØ¯ Ø§Ù„ÙˆØ§Ø±Ø¯Ø§ØªØŸâ€¬
â€¢ Should the government restrict
imports?
List the four elements of the economic way of thinking.
â€œThe theory of economics does not furnish a body of settled
conclusions immediately applicable to policy. It is a method
rather than a doctrine, an apparatus of the mind, a technique
of thinking which helps its possessor draw correct
.”â€«ØªØ³Ø§Ø¹Ø¯ Ø­Ø§Ø¦Ø²Ù‡Ø§ Ø¹Ù„Ù‰ Ø§Ø³ØªØ®Ø§Ù„Øµ Ø§Ø§Ù„Ø³ØªÙ†ØªØ§Ø¬Ø§Øª Ø§Ù„ØµØ­ÙŠØ­Ø©â€¬
John Maynard Keynes, The Collected Writings of John Maynard
Keynes, Volume 77 â€« Ø§Ù„Ù…Ø¬Ù„Ø¯â€¬ØŒâ€« Ø§Ù„ÙƒØªØ§Ø¨Ø§Øª Ø§Ù„ØªÙŠ ØªÙ… Ø¬Ù…Ø¹Ù‡Ø§ Ù„Ø¬ÙˆÙ† Ù…Ø§ÙŠÙ†Ø§Ø±Ø¯ ÙƒÙŠÙ†Ø²â€¬ØŒâ€«Ø¬ÙˆÙ† Ù…Ø§ÙŠÙ†Ø§Ø±Ø¯ ÙƒÙŠÙ†Ø²â€¬
Use Assumptions to Simplifyâ€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ø§Ù„ÙØªØ±Ø§Ø¶Ø§Øª Ù„ØªØ¨Ø³ÙŠØ·â€¬
Economists use assumptions to make things simpler and
focus attention on what really matters.
We have to be careful to make the right assumptions and
simplifications.
â€«ÙˆÙŠØ³ØªØ®Ø¯Ù… Ø®Ø¨Ø±Ø§Ø¡ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ø§Ù„ÙØªØ±Ø§Ø¶Ø§Øª Ù„Ø¬Ø¹Ù„ Ø§Ø£Ù„Ù…ÙˆØ± Ø£ÙƒØ«Ø± Ø¨Ø³Ø§Ø·Ø©â€¬
â€«ÙˆØªØ±ÙƒÙŠØ² Ø§Ø§Ù„Ù†ØªØ¨Ø§Ù‡ Ø¹Ù„Ù‰ Ù…Ø§ ÙŠÙ‡Ù… Ø­Ù‚Ø§â€¬.
â€«ÙˆØ¹Ù„ÙŠÙ†Ø§ Ø£Ù† Ù†ÙƒÙˆÙ† Ø­Ø°Ø±ÙŠÙ† Ù„ÙˆØ¶Ø¹ Ø§Ø§Ù„ÙØªØ±Ø§Ø¶Ø§Øª ÙˆØ§Ù„ØªØ¨Ø³ÙŠØ·Ø§Øª Ø§Ù„ØµØ­ÙŠØ­Ø©â€¬.
Isolate Variablesâ€”Ceteris Paribus
â€«Ø¹Ø²Ù„ Ø§Ù„Ù…ØªØºÙŠØ±Ø§Øªâ€¬- â€«Ø³ÙŠØªÙŠØ±ÙŠØ³ Ø¨Ø§Ø±ÙŠØ¨ÙˆØ³â€¬
Economists often consider how one variable changes in isolation, in
order to see how its changes affect other variables
â€«ØªØºÙŠÙŠØ±Ø§ØªÙ‡ Ø¹Ù„Ù‰ Ø§Ù„Ù…ØªØºÙŠØ±Ø§Øª Ø§Ø£Ù„Ø®Ø±Ù‰â€¬.
Variable: A measure of something that can take on different values.
.â€« Ù…Ù‚ÙŠØ§Ø³ Ù„Ø´ÙŠØ¡ ÙŠÙ…ÙƒÙ† Ø£Ù† ÙŠØ£Ø®Ø° Ø¹Ù„Ù‰ Ù‚ÙŠÙ… Ù…Ø®ØªÙ„ÙØ©â€¬:â€«Ø§Ù„Ù…ØªØºÙŠØ±â€¬
Ceteris Paribus: The Latin expression meaning that other variables
are held fixed
Ceteris Paribus: .â€«Ø§Ù„ØªØ¹Ø¨ÙŠØ± Ø§Ù„Ø§Ù„ØªÙŠÙ†ÙŠ ÙŠØ¹Ù†ÙŠ Ø£Ù† ÙŠØªÙ… ØªØ«Ø¨ÙŠØª Ø§Ù„Ù…ØªØºÙŠØ±Ø§Øª Ø§Ø£Ù„Ø®Ø±Ù‰â€¬
.
Think at the Marginâ€«ÙÙƒØ± ÙÙŠ Ø§Ù„Ù‡Ø§Ù…Ø´â€¬
How will a small change in one variable affect another
variable, and what impact will that have on peopleâ€™s
decision-making?
â€« ÙˆÙ…Ø§ Ù‡Ùˆ ØªØ£Ø«ÙŠØ± Ø°Ù„Ùƒ Ø¹Ù„Ù‰â€¬ØŒâ€«ÙƒÙŠÙ Ø³ÙŠØ¤Ø«Ø± Ø§Ù„ØªØºÙŠÙŠØ± Ø§Ù„ØµØºÙŠØ± ÙÙŠ Ù…ØªØºÙŠØ± Ù…Ø§ Ø¹Ù„Ù‰ Ù…ØªØºÙŠØ± Ø¢Ø®Ø±â€¬
Marginal Change: A small, one-unit change in value
Rational People Respond to Incentivesâ€«Ø§Ù„Ø¹Ù‚Ø§Ù„Ø¡ ÙŠØ³ØªØ¬ÙŠØ¨ÙˆÙ† Ù„Ù„Ø­ÙˆØ§ÙØ²â€¬
A key assumption of most economic analysis is that people act rationally,
that is, in their own self-interest.
This does not mean that people are only motivated by self-interest, but instead
that this is their primary motivation.
â€« ÙØ¥Ù† Ù‡Ø°Ø§ Ù‡Ùˆ Ø§Ù„Ø¯Ø§ÙØ¹ Ø§Ø£Ù„Ø³Ø§Ø³ÙŠâ€¬ØŒ â€« ÙˆÙ„ÙƒÙ† Ø¨Ø¯Ø§Ù„Ù‹ Ù…Ù† Ø°Ù„Ùƒâ€¬ØŒ â€«Ù‡Ø°Ø§ Ø§Ù„ ÙŠØ¹Ù†ÙŠ Ø£Ù† Ø§Ù„Ù†Ø§Ø³ Ù…Ø¯ÙÙˆØ¹ÙˆÙ† ÙÙ‚Ø· Ø¨Ø§Ù„Ù…ØµÙ„Ø­Ø© Ø§Ù„Ø°Ø§ØªÙŠØ©â€¬
Rationality implies that when the payoff (benefit) to doing something changes,
people will change their behavior to make their payoff as large as possible
â€« Ø³ÙŠØºÙŠØ± Ø§Ù„Ù†Ø§Ø³ Ø³Ù„ÙˆÙƒÙ‡Ù… Ù„Ø¬Ø¹Ù„ Ù…Ø±Ø¯ÙˆØ¯Ù‡Ù…â€¬ØŒ â€«Ø§Ù„Ø¹Ù‚Ø§Ù„Ù†ÙŠØ© ØªØ¹Ù†ÙŠ Ø£Ù†Ù‡ Ø¹Ù†Ø¯Ù…Ø§ ÙŠØªØºÙŠØ± Ø§Ù„Ù…Ø±Ø¯ÙˆØ¯ (Ø§Ù„ÙØ§Ø¦Ø¯Ø©) Ù„ÙØ¹Ù„ Ø´ÙŠØ¡ Ù…Ø§â€¬
â€«Ø£ÙƒØ¨Ø± Ù‚Ø¯Ø± Ù…Ù…ÙƒÙ†â€¬.
1.4 Microeconomics Vs Macroeconomics â€« Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠ Ù…Ù‚Ø§Ø¨Ù„â€¬1.4
â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠâ€¬
The field of economics is divided into two categories: macroeconomics and
microeconomics.
â€« Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠ ÙˆØ§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠâ€¬:â€«ÙŠÙ†Ù‚Ø³Ù… Ù…Ø¬Ø§Ù„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø¥Ù„Ù‰ ÙØ¦ØªÙŠÙ†â€¬
Macroeconomics: The study of the nationâ€™s economy as a whole; focuses on the
issues of inflation, unemployment, and economic growth.
.â€« Ø¯Ø±Ø§Ø³Ø© Ø§Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¨Ù„Ø¯ ÙƒÙƒÙ„Ø› ÙŠØ±ÙƒØ² Ø¹Ù„Ù‰ Ù‚Ø¶Ø§ÙŠØ§ Ø§Ù„ØªØ¶Ø®Ù… ÙˆØ§Ù„Ø¨Ø·Ø§Ù„Ø© ÙˆØ§Ù„Ù†Ù…Ùˆ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠâ€¬:â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠâ€¬
Microeconomics: The study of the choices made by households, firms,
and governments, and how these choices affect the markets for goods and
services
â€« ÙˆÙƒÙŠÙ ØªØ¤Ø«Ø± Ù‡Ø°Ù‡ Ø§Ù„Ø®ÙŠØ§Ø±Ø§Øª Ø¹Ù„Ù‰ Ø£Ø³ÙˆØ§Ù‚â€¬ØŒâ€« Ø¯Ø±Ø§Ø³Ø© Ø§Ù„Ø®ÙŠØ§Ø±Ø§Øª Ø§Ù„ØªÙŠ Ø§ØªØ®Ø°ØªÙ‡Ø§ Ø§Ø£Ù„Ø³Ø± ÙˆØ§Ù„Ø´Ø±ÙƒØ§Øª ÙˆØ§Ù„Ø­ÙƒÙˆÙ…Ø§Øªâ€¬:â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠâ€¬
â€«Ø§Ù„Ø³Ù„Ø¹ ÙˆØ§Ù„Ø®Ø¯Ù…Ø§Øªâ€¬
.
Using Macroeconomics to Understand Why Economies Grow
â€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠ Ù„ÙÙ‡Ù… Ø³Ø¨Ø¨ Ù†Ù…Ùˆ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯Ø§Øªâ€¬
The world economy has been growing in recent decades, averaging
about 1.5 percent higher per capita income per year.
. â€« ÙÙ‰ Ø§Ù„Ù…Ø§Ø¦Ø©â€¬1.5 â€«ÙˆÙ‚Ø¯ Ø´Ù‡Ø¯ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¹Ø§Ù„Ù…Ù‰ Ù†Ù…ÙˆØ§ ÙÙ‰ Ø§Ù„Ø¹Ù‚ÙˆØ¯ Ø§Ø§Ù„Ø®ÙŠØ±Ø© Ø­ÙŠØ« Ø¨Ù„Øº Ù…ØªÙˆØ³Ø· Ø¯Ø®Ù„ Ø§Ù„ÙØ±Ø¯ ÙÙ‰ Ø§Ù„Ø¹Ø§Ù…â€¬
Why do some countries grow much faster than others?
Macroeconomics will help us understand why.
.â€«Ù„Ù…Ø§Ø°Ø§ ØªÙ†Ù…Ùˆ Ø¨Ø¹Ø¶ Ø§Ù„Ø¨Ù„Ø¯Ø§Ù† Ø¨ÙˆØªÙŠØ±Ø© Ø£Ø³Ø±Ø¹ Ù…Ù† ØºÙŠØ±Ù‡Ø§ØŸ ÙˆØ³ÙŠØ³Ø§Ø¹Ø¯Ù†Ø§ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠ Ø¹Ù„Ù‰ ÙÙ‡Ù… Ø§Ù„Ø³Ø¨Ø¨â€¬
Using Macroeconomics to Understand Economic
Fluctuationsâ€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠ Ù„ÙÙ‡Ù… Ø§Ù„ØªÙ‚Ù„Ø¨Ø§Øª Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠØ©â€¬
All countries, even those where per capita income is
generally rising, experience economic fluctuations,
including periods where the economy temporarily shrinks.
â€« Ø¨Ù…Ø§ ÙÙŠ Ø°Ù„Ùƒâ€¬ØŒâ€« ØªØ¹Ø§Ù†ÙŠ Ù…Ù† ØªÙ‚Ù„Ø¨Ø§Øª Ø§Ù‚ØªØµØ§Ø¯ÙŠØ©â€¬ØŒâ€« Ø­ØªÙ‰ ØªÙ„Ùƒ Ø§Ù„ØªÙŠ ÙŠØ±ØªÙØ¹ ÙÙŠÙ‡Ø§ Ø¯Ø®Ù„ Ø§Ù„ÙØ±Ø¯ Ø¹Ù…ÙˆÙ…Ø§â€¬ØŒâ€«Ø¬Ù…ÙŠØ¹ Ø§Ù„Ø¨Ù„Ø¯Ø§Ù†â€¬
â€«Ø§Ù„ÙØªØ±Ø§Øª Ø§Ù„ØªÙŠ ÙŠÙ†ÙƒÙ…Ø´ ÙÙŠÙ‡Ø§ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ù…Ø¤Ù‚ØªØ§â€¬
What options do governments have to moderate these
fluctuations?
And should they do so?
â€«ÙˆÙ‡Ù„ ÙŠÙ†Ø¨ØºÙŠ Ù„Ù‡Ù… Ø£Ù† ÙŠÙØ¹Ù„ÙˆØ§ Ø°Ù„ÙƒØŸâ€¬
Using Macroeconomics to Make Informed Business
A manager who studies macroeconomics will be better
equipped to understand the complexities of interest rates
and inflation, and how they affect the firm.
ØŒâ€«ÙˆØ³ÙŠÙƒÙˆÙ† Ø§Ù„Ù…Ø¯ÙŠØ± Ø§Ù„Ø°ÙŠ ÙŠØ¯Ø±Ø³ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠ Ù…Ø¬Ù‡Ø²Ø§ Ù‹ Ø¨Ø´ÙƒÙ„ Ø£ÙØ¶Ù„ Ù„ÙÙ‡Ù… ØªØ¹Ù‚ÙŠØ¯Ø§Øª Ø£Ø³Ø¹Ø§Ø± Ø§Ù„ÙØ§Ø¦Ø¯Ø© ÙˆØ§Ù„ØªØ¶Ø®Ù…â€¬
Should a firm borrow money now at a fixed interest rate? Or wait a
while, hoping interest rates will fall?
â€« Ø¹Ù„Ù‰ Ø£Ù…Ù„ Ø£Ù† ØªÙ†Ø®ÙØ¶â€¬ØŒâ€«Ù‡Ù„ ÙŠÙ†Ø¨ØºÙŠ Ø£Ù† ØªÙ‚ØªØ±Ø¶ Ø§Ù„Ø´Ø±ÙƒØ© Ø§Ù„Ù…Ø§Ù„ Ø§Ø¢Ù„Ù† Ø¨Ø³Ø¹Ø± ÙØ§Ø¦Ø¯Ø© Ø«Ø§Ø¨ØªØŸ Ø£Ùˆ Ø§Ø§Ù„Ù†ØªØ¸Ø§Ø± Ù„ÙØªØ±Ø©â€¬
Using Microeconomics to Understand Markets and
Predict Changesâ€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠ Ù„ÙÙ‡Ù… Ø§Ø£Ù„Ø³ÙˆØ§Ù‚ ÙˆØ§Ù„ØªÙ†Ø¨Ø¤ Ø¨Ø§Ù„ØªØºÙŠØ±Ø§Øªâ€¬
One reason for studying microeconomics is to better understand how
markets work and to predict how various events affect the prices and
quantities of products in markets.
.â€«Ø¹Ù„Ù‰ Ø£Ø³Ø¹Ø§Ø± ÙˆÙƒÙ…ÙŠØ§Øª Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª ÙÙŠ Ø§Ø£Ù„Ø³ÙˆØ§Ù‚â€¬
For example, how would a tax on beer affect::â€« ÙƒÙŠÙ Ø³ØªØ¤Ø«Ø± Ø¶Ø±ÙŠØ¨Ø© Ø§Ù„Ø¨ÙŠØ±Ø© Ø¹Ù„Ù‰â€¬ØŒâ€«Ø¹Ù„Ù‰ Ø³Ø¨ÙŠÙ„ Ø§Ù„Ù…Ø«Ø§Ù„â€¬
1. The price of beer?â€«Ø³Ø¹Ø± Ø§Ù„Ø¨ÙŠØ±Ø©ØŸâ€¬
3. How many people are likely to drink and drive?
Using Microeconomics to Make Personal and Managerial
On the personal level, we use economic analysis to decide how to spend our time,
what career to pursue, and how to spend and save the money we earn
ØŒâ€« ÙˆÙ…Ø§ Ù‡ÙŠ Ø§Ù„Ù…Ù‡Ù†Ø© Ø§Ù„ØªÙŠ ÙŠØ¬Ø¨ Ø§ØªØ¨Ø§Ø¹Ù‡Ø§â€¬ØŒâ€« Ù†Ø³ØªØ®Ø¯Ù… Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠ Ù„ØªØ­Ø¯ÙŠØ¯ ÙƒÙŠÙÙŠØ© Ù‚Ø¶Ø§Ø¡ ÙˆÙ‚ØªÙ†Ø§â€¬ØŒâ€«Ø¹Ù„Ù‰ Ø§Ù„Ù…Ø³ØªÙˆÙ‰ Ø§Ù„Ø´Ø®ØµÙŠâ€¬
.â€«ÙˆÙƒÙŠÙÙŠØ© Ø¥Ù†ÙØ§Ù‚ ÙˆØªÙˆÙÙŠØ± Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ø°ÙŠ Ù†ÙƒØ³Ø¨Ù‡â€¬
.
Managers use economic analysis to decide how to produce goods and
services, how much to produce, and how much to charge for them.
â€« ÙˆÙƒÙ… ÙŠØ¬Ø¨ Ø£Ù† ÙŠØªÙ…â€¬ØŒâ€« ÙˆÙƒÙ… Ù…Ù† Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬ØŒâ€«ÙŠØ³ØªØ®Ø¯Ù… Ø§Ù„Ù…Ø¯ÙŠØ±ÙˆÙ† Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠ Ù„ØªØ­Ø¯ÙŠØ¯ ÙƒÙŠÙÙŠØ© Ø¥Ù†ØªØ§Ø¬ Ø§Ù„Ø³Ù„Ø¹ ÙˆØ§Ù„Ø®Ø¯Ù…Ø§Øªâ€¬
.â€«ÙØ±Ø¶ Ø±Ø³ÙˆÙ… Ø¹Ù„ÙŠÙ‡Ø§â€¬
Using Microeconomics to Evaluate Public Policies
â€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠ Ù„ØªÙ‚ÙŠÙŠÙ… Ø§Ù„Ø³ÙŠØ§Ø³Ø§Øª Ø§Ù„Ø¹Ø§Ù…Ø©â€¬
We can use economic analysis to determine how well the government
performs its roles in the market economy.
.â€«ÙŠÙ…ÙƒÙ†Ù†Ø§ Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠ Ù„ØªØ­Ø¯ÙŠØ¯ Ù…Ø¯Ù‰ Ø£Ø¯Ø§Ø¡ Ø§Ù„Ø­ÙƒÙˆÙ…Ø© Ù„Ø¯ÙˆØ±Ù‡Ø§ ÙÙŠ Ø§Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø³ÙˆÙ‚â€¬
For example, prescription drugs are protected from being copied because
of government patents.
If we shortened patent lengths, we may get cheaper generic drugs sooner; but
fewer drugs may get developed because of the decreased profitability of drug
development.
â€« ÙÙ‚Ø¯ Ù†Ø­ØµÙ„ Ø¹Ù„Ù‰ Ø£Ø¯ÙˆÙŠØ© ØºÙŠØ± Ù…Ø´Ø±ÙˆØ¹Ø© Ø£Ø±Ø®Øµ ÙÙŠ ÙˆÙ‚Øª Ø£Ù‚Ø±Ø¨Ø› ÙˆÙ„ÙƒÙ† Ù‚Ø¯ ØªØ­ØµÙ„â€¬ØŒâ€«Ø¥Ø°Ø§ Ù‚Ù…Ù†Ø§ Ø¨ØªÙ‚ØµÙŠØ± Ø£Ø·ÙˆØ§Ù„ Ø§Ù„Ø¨Ø±Ø§Ø¡Ø§Øªâ€¬
Microeconomics can help evaluate the best policy here.
.â€«ÙˆÙŠÙ…ÙƒÙ† Ù„Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠ Ø£Ù† ÙŠØ³Ø§Ø¹Ø¯ ÙÙŠ ØªÙ‚ÙŠÙŠÙ… Ø£ÙØ¶Ù„ Ø³ÙŠØ§Ø³Ø© Ù‡Ù†Ø§â€¬
Key Termsâ€«Ø´Ø±ÙˆØ· Ø§Ù„Ù…ÙØªØ§Ø­â€¬
Ceteris paribus
Marginal change
â€«Ø³ÙŠØªÙŠØ±ÙŠØ³ Ø¨Ø§Ø±ÙŠØ¨ÙˆØ³â€¬
â€«Ø§Ù„Ù†Ù…ÙˆØ°Ø¬ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠâ€¬
Economics
â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯â€¬
â€«ØªÙ†Ø¸ÙŠÙ… Ø§Ù„Ù…Ø´Ø§Ø±ÙŠØ¹â€¬
Entrepreneurship
â€«Ø¹ÙˆØ§Ù…Ù„ Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
â€«Ø±Ø£Ø³ Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ø¨Ø´Ø±ÙŠâ€¬
Factors of production
â€«Ø§Ù„Ø¹Ù…Ù„â€¬
â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„ÙƒÙ„ÙŠâ€¬
Human capital
Microeconomics
Labor
Scarcity
Macroeconomics
Variable
Economic model
Natural resources
Normative analysis
Physical capital
Positive analysis
â€«Ø§Ù„ØªØºÙŠØ± Ø§Ù„Ù‡Ø§Ù…Ø´ÙŠâ€¬
â€«Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø§Ù„Ø¬Ø²Ø¦ÙŠâ€¬
â€«Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ù„Ù…Ø¹ÙŠØ§Ø±ÙŠâ€¬
â€«Ø±Ø£Ø³ Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ù…Ø§Ø¯ÙŠâ€¬
â€«Ø§Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø¥Ù„ÙŠØ¬Ø§Ø¨ÙŠâ€¬
â€«Ù†Ø¯Ø±Ù‡â€¬
â€«Ù…ØªØºÙŠØ±â€¬
1A.1 Using Graphs 1A.1 â€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ù„Ø±Ø³ÙˆÙ… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ©â€¬
Economists use several types of graphs to present data,
represent relationships between variables, and explain
concepts.
ØŒâ€« ÙˆØªÙ…Ø«ÙŠÙ„ Ø§Ù„Ø¹Ø§Ù„Ù‚Ø§Øª Ø¨ÙŠÙ† Ø§Ù„Ù…ØªØºÙŠØ±Ø§Øªâ€¬ØŒâ€«ÙŠØ³ØªØ®Ø¯Ù… Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠÙˆÙ† Ø¹Ø¯Ø© Ø£Ù†ÙˆØ§Ø¹ Ù…Ù† Ø§Ù„Ø±Ø³ÙˆÙ… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ© Ù„Ø¹Ø±Ø¶ Ø§Ù„Ø¨ÙŠØ§Ù†Ø§Øªâ€¬
.â€«ÙˆØ´Ø±Ø­ Ø§Ù„Ù…ÙØ§Ù‡ÙŠÙ…â€¬
Although it is possible to do economics without graphs, itâ€™s
a lot easier with them in your toolbox.
â€« ÙÙ…Ù† Ø§Ø£Ù„Ø³Ù‡Ù„ ÙƒØ«ÙŠØ±Ø§ Ù…Ø¹Ù‡Ù… ÙÙŠâ€¬ØŒ â€«Ø¹Ù„Ù‰ Ø§Ù„Ø±ØºÙ… Ù…Ù† Ø£Ù†Ù‡ Ù…Ù† Ø§Ù„Ù…Ù…ÙƒÙ† Ø§Ù„Ù‚ÙŠØ§Ù… Ø¨Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ø¯ÙˆÙ† Ø§Ù„Ø±Ø³ÙˆÙ… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ©â€¬
â€«ØµÙ†Ø¯ÙˆÙ‚ Ø§Ø£Ù„Ø¯ÙˆØ§Øª Ø§Ù„Ø®Ø§Øµ Ø¨Ùƒâ€¬
Figure 1A.1 Graphs of Single Variables1 â€« Ø§Ù„Ø´ÙƒÙ„â€¬A.1 â€«Ø§Ù„Ø±Ø³ÙˆÙ… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ©â€¬
Left: Pie Graph for Types of Recorded Music Sold in the United States
Right: Bar Graph for U.S. Export Sales of Copyrighted Products
â€«Ø¥Ù„Ù‰ Ø§Ù„ÙŠØ³Ø§Ø±â€¬: â€«Ø±Ø³Ù… Ø¨ÙŠØ§Ù†ÙŠ Ø¯Ø§Ø¦Ø±ÙŠ Ø£Ù„Ù†ÙˆØ§Ø¹ Ø§Ù„Ù…ÙˆØ³ÙŠÙ‚Ù‰ Ø§Ù„Ù…Ø³Ø¬Ù„Ø© Ø§Ù„ØªÙŠ ØªÙ… Ø¨ÙŠØ¹Ù‡Ø§ ÙÙŠ Ø§Ù„ÙˆØ§Ù„ÙŠØ§Øª Ø§Ù„Ù…ØªØ­Ø¯Ø©â€¬
â€«Ø§Ù„ÙŠÙ…ÙŠÙ†â€¬: â€«Ø´Ø±ÙŠØ· Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠ Ù„Ù…Ø¨ÙŠØ¹Ø§Øª ØµØ§Ø¯Ø±Ø§Øª Ø§Ù„ÙˆØ§Ù„ÙŠØ§Øª Ø§Ù„Ù…ØªØ­Ø¯Ø© Ù…Ù† Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª Ø§Ù„Ù…Ø­Ù…ÙŠØ© Ø¨Ø­Ù‚ÙˆÙ‚ Ø§Ù„Ø·Ø¨Ø¹ ÙˆØ§Ù„Ù†Ø´Ø±â€¬
Figure 1A.2 Time Series Graph1 â€« Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠâ€¬A.2 â€«Ø³Ù„Ø³Ù„Ø© Ø§Ù„ÙˆÙ‚Øªâ€¬
A time series graph shows how the value of a variable changes
over time. In the right panel, the vertical axis is truncated,
indicated by the double hash marks on the y-axis. This
exaggerates the fluctuations in the data.
â€«ÙÙŠ Ø§Ù„ØªÙ‚Ù„Ø¨Ø§Øª ÙÙŠ Ø§Ù„Ø¨ÙŠØ§Ù†Ø§Øªâ€¬.
Figure 1A.3 Basic Elements of a Two-Variable Graph1 â€« Ø§Ù„Ø´ÙƒÙ„â€¬A.3 â€«Ø§Ù„Ø¹Ù†Ø§ØµØ±â€¬
One variable is measured along the
horizontal, or x, axis, while the other variable
is measured along the vertical, or y, axis.
â€« Ø£Ùˆâ€¬ØŒâ€«ÙŠØªÙ… Ù‚ÙŠØ§Ø³ Ù…ØªØºÙŠØ± ÙˆØ§Ø­Ø¯ Ø¹Ù„Ù‰ Ø§Ù„Ù…Ø­ÙˆØ± Ø§Ø£Ù„ÙÙ‚ÙŠâ€¬x â€« Ø¨ÙŠÙ†Ù…Ø§ ÙŠØªÙ… Ù‚ÙŠØ§Ø³â€¬ØŒ
â€« Ø£Ùˆ Ø§Ù„Ù…Ø­ÙˆØ±â€¬ØŒâ€«Ø§Ù„Ù…ØªØºÙŠØ± Ø§Ø¢Ù„Ø®Ø± Ø¹Ù„Ù‰ Ø§Ù„Ù…Ø­ÙˆØ± Ø§Ù„Ø¹Ù…ÙˆØ¯ÙŠâ€¬yØŒ
The origin is defined as the intersection of
the two axes, where the values of both
variables are zero.
â€« Ø­ÙŠØ« ØªÙƒÙˆÙ† Ù‚ÙŠÙ… ÙƒØ§Ù„â€¬ØŒâ€«ÙŠØªÙ… ØªØ¹Ø±ÙŠÙ Ø§Ø£Ù„ØµÙ„ ÙƒØªÙ‚Ø§Ø·Ø¹ Ø§Ù„Ù…Ø­ÙˆØ±ÙŠÙ†â€¬
.Ù‹ â€«Ø§Ù„Ù…ØªØºÙŠØ±ÙŠÙ† ØµÙØ±Ø§â€¬
The dashed lines show the values of the two
variables at a particular point.
Graphing Two Variablesâ€«Ø§Ù„Ù…ØªØºÙŠØ±Ø§Øªâ€¬
The slope of a line relating two variables on a graph indicates whether they
have a positive or negative relationship.
.â€«ÙŠØ´ÙŠØ± Ù…ÙŠÙ„ Ø®Ø· Ø§Ù„Ø°ÙŠ ÙŠØ±ØªØ¨Ø· Ù…ØªØºÙŠØ±ÙŠÙ† ÙÙŠ Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠ Ø¥Ù„Ù‰ Ù…Ø§ Ø¥Ø°Ø§ ÙƒØ§Ù†Øª Ù„Ø¯ÙŠÙ‡Ù… Ø¹Ø§Ù„Ù‚Ø© Ù…ÙˆØ¬Ø¨Ø© Ø£Ùˆ Ø³Ø§Ù„Ø¨Ø©â€¬
Positive relationship: A relationship in which two variables move in the
same direction.
Negative relationship: A relationship in which two variables move in
opposite directions.
Figure 1A.4 Relationship between Hours Worked and Income
â€«Ø§Ù„Ø´ÙƒÙ„â€¬1 â€«Ø£Ù„Ùâ€¬-4 â€«Ø§Ù„Ø¹Ø§Ù„Ù‚Ø© Ø¨ÙŠÙ† Ø³Ø§Ø¹Ø§Øª Ø§Ù„Ø¹Ù…Ù„ ÙˆØ§Ù„Ø¯Ø®Ù„â€¬
There is a positive relationship
between work hours and income, so
the income curve is positively sloped
.â€«ÙˆØ¨Ø§Ù„ØªØ§Ù„ÙŠ ÙØ¥Ù† Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¯Ø®Ù„ Ù…Ù†Ø­Ø¯Ø± Ø¨Ø´ÙƒÙ„ Ø¥ÙŠØ¬Ø§Ø¨ÙŠâ€¬
.â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øªâ€¬8 â€«ØªØ²ÙŠØ¯ Ø§Ù„Ø¯Ø®Ù„ Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬.
The slope of the curve is \$8: Each
income by \$8.
.â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øªâ€¬8 â€«ØªØ²ÙŠØ¯ Ø§Ù„Ø¯Ø®Ù„ Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬
Computing the Slopeâ€«Ø­Ø³Ø§Ø¨ Ø§Ù„Ù…Ù†Ø­Ø¯Ø±â€¬
ï„Income
ï„Work hours
Vertical difference between two points rise
Slope =
=
Horizontal difference between two points run
Slope =
Slope of a curve: The vertical difference between two points (the rise)
divided by the horizontal difference (the run).
.)â€« Ø§Ù„ÙØ±Ù‚ Ø§Ù„Ø±Ø£Ø³ÙŠ Ø¨ÙŠÙ† Ù†Ù‚Ø·ØªÙŠÙ† (Ø§Ø§Ù„Ø±ØªÙØ§Ø¹) Ù…Ù‚Ø³ÙˆÙ…Ø§ Ù‹ Ø¹Ù„Ù‰ Ø§Ù„ÙØ±Ù‚ Ø§Ø£Ù„ÙÙ‚ÙŠ (Ø§Ù„Ù…Ø¯Ù‰â€¬:â€«Ù…ÙŠÙ„ Ø§Ù„Ù…Ù†Ø­Ù†Ù‰â€¬
In general, if the variable on the vertical axis is y and the variable on the
horizontal axis is x, we can express the slope as:
â€« Ø¥Ø°Ø§ ÙƒØ§Ù† Ø§Ù„Ù…ØªØºÙŠØ± Ø¹Ù„Ù‰ Ø§Ù„Ù…Ø­ÙˆØ± Ø§Ù„Ø¹Ù…ÙˆØ¯ÙŠ Ù‡Ùˆâ€¬ØŒâ€«Ø¨Ø´ÙƒÙ„ Ø¹Ø§Ù…â€¬y â€«ÙˆØ§Ù„Ù…ØªØºÙŠØ± Ø¹Ù„Ù‰ Ø§Ù„Ù…Ø­ÙˆØ± Ø§Ø£Ù„ÙÙ‚ÙŠ Ù‡Ùˆâ€¬x â€« ÙŠÙ…ÙƒÙ†Ù†Ø§â€¬ØŒ
â€«Ø§Ù„ØªØ¹Ø¨ÙŠØ± Ø¹Ù† Ø§Ù„Ù…ÙŠÙ„ Ø¹Ù„Ù‰ Ø§Ù„Ù†Ø­Ùˆâ€¬
Slope =
ï„y
ï„x
Figure 1A.5 Movement Along a Curve versus Shifting the Curve
1 â€«Ø§Ù„Ø´ÙƒÙ„â€¬A.5 â€«Ø­Ø±ÙƒØ© Ø¹Ù„Ù‰ Ø·ÙˆÙ„ Ù…Ù†Ø­Ù†Ù‰ Ù…Ù‚Ø§Ø¨Ù„ ØªØ­ÙˆÙŠÙ„ Ø§Ù„Ù…Ù†Ø­Ù†Ù‰â€¬
To draw a curve showing the relationship between
hours worked and income, we fix the weekly
allowance (\$40) and the wage (\$8 per hour) â€«Ù„Ø±Ø³Ù… Ù…Ù†Ø­Ù†Ù‰â€¬
40( â€« Ù†Ù‚ÙˆÙ… Ø¨Ø¥ØµØ§Ù„Ø­ Ø§Ù„Ø¨Ø¯Ù„ Ø§Ø£Ù„Ø³Ø¨ÙˆØ¹ÙŠâ€¬ØŒâ€«ÙŠØ¨ÙŠÙ† Ø§Ù„Ø¹Ø§Ù„Ù‚Ø© Ø¨ÙŠÙ† Ø³Ø§Ø¹Ø§Øª Ø§Ù„Ø¹Ù…Ù„ ÙˆØ§Ù„Ø¯Ø®Ù„â€¬
.)â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª ÙÙŠ Ø§Ù„Ø³Ø§Ø¹Ø©â€¬8( â€«Ø¯ÙˆØ§Ù„Ø±Ø§) ÙˆØ§Ø£Ù„Ø¬Ø±â€¬
.
Ù‹
A change in the hours worked causes movement
along the curve, for example, from point b to point c.
ØŒâ€« Ø¹Ù„Ù‰ Ø³Ø¨ÙŠÙ„ Ø§Ù„Ù…Ø«Ø§Ù„â€¬ØŒâ€«ØªØºÙŠÙŠØ± ÙÙŠ Ø³Ø§Ø¹Ø§Øª Ø§Ù„Ø¹Ù…Ù„ ÙŠØ³Ø¨Ø¨ Ø­Ø±ÙƒØ© Ø¹Ù„Ù‰ Ø·ÙˆÙ„ Ø§Ù„Ù…Ù†Ø­Ù†Ù‰â€¬
A change in any other variable shifts the entire curve.
For example, a \$50 increase in the allowance (to \$90)
shifts the entire curve upward by \$50.
â€« ÙØ¥Ù† Ø²ÙŠØ§Ø¯Ø©â€¬ØŒâ€« ÙØ¹Ù„Ù‰ Ø³Ø¨ÙŠÙ„ Ø§Ù„Ù…Ø«Ø§Ù„â€¬.â€«ØªØºÙŠÙŠØ± ÙÙŠ Ø£ÙŠ Ù…ØªØºÙŠØ± Ø¢Ø®Ø± Ø¥Ø²Ø§Ø­Ø© Ù…Ù†Ø­Ù†Ù‰ Ø¨Ø£ÙƒÙ…Ù„Ù‡â€¬
â€« Ø¯ÙˆØ§Ù„Ø±Ø§) ØªØ­ÙˆÙ„ Ø§Ù„Ù…Ù†Ø­Ù†Ù‰ Ø¨Ø£ÙƒÙ…Ù„Ù‡ Ø¥Ù„Ù‰ Ø§Ø£Ù„Ø¹Ù„Ù‰â€¬90 â€« Ø¯ÙˆØ§Ù„Ø±Ø§ (Ø¥Ù„Ù‰â€¬50 â€«Ø§Ù„Ø¨Ø¯Ù„ Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬
â€« Ø¯ÙˆØ§Ù„Ø±Ø§â€¬50 â€«Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬
Figure 1A.6 Negative Relationship between CD Purchases and
There is a negative relationship between the
consumer can afford with a budget of \$360.
â€«Ù‡Ù†Ø§Ùƒ Ø¹Ø§Ù„Ù‚Ø© Ø³Ù„Ø¨ÙŠØ© Ø¨ÙŠÙ† Ø¹Ø¯Ø¯ Ù…Ù†â€¬C Ds â€«ÙˆØ§Ø£Ù„ØºØ§Ù†ÙŠ Ø§Ù„ØªÙŠ ØªÙ… ØªØ­Ù…ÙŠÙ„Ù‡Ø§ Ø§Ù„ØªÙŠ ÙŠÙ…ÙƒÙ†â€¬
.â€« Ø¯ÙˆØ§Ù„Ø±Ø§â€¬360 â€«Ù„Ù„Ù…Ø³ØªÙ‡Ù„Ùƒ ØªØ­Ù…Ù„ Ù…Ø¹ Ù…ÙŠØ²Ø§Ù†ÙŠØ© Ù‚Ø¯Ø±Ù‡Ø§â€¬
The slope of the curve is âˆ’\$12: Each additional CD (at
a price of \$12 each) decreases the number of
12- â€«Ù…ÙŠÙ„ Ø§Ù„Ù…Ù†Ø­Ù†Ù‰ Ù‡Ùˆâ€¬
Ù‹
)â€«Ø¯ÙˆØ§Ù„Ø±Ø§ Ù„ÙƒÙ„ Ù…Ù†Ù‡Ø§) ØªÙ‚Ù„Ù„ Ù…Ù† Ø¹Ø¯Ø¯ Ø§Ø£Ù„ØºØ§Ù†ÙŠ Ø§Ù„Ù‚Ø§Ø¨Ù„Ø© Ù„Ù„ØªÙ†Ø²ÙŠÙ„ (Ø¨Ø³Ø¹Ø± Ø¯ÙˆØ§Ù„Ø± Ù„ÙƒÙ„ Ù…Ù†Ù‡Ù…Ø§â€¬
Ù‹
Slope =
Vertical difference
Horizontal difference
=
120 âˆ’ 240 âˆ’ 120
=
= âˆ’ 12
20 âˆ’ 10
10
Figure 1A.7 Nonlinear Relationships (1 of 21 â€« Ø§Ù„Ø´ÙƒÙ„â€¬A.7 )2 â€« Ù…Ù†â€¬1( â€«Ø§Ù„Ø¹Ø§Ù„Ù‚Ø§Øª ØºÙŠØ± Ø§Ù„Ø®Ø·ÙŠØ©â€¬
)
There is a positive and nonlinear relationship
between study time and the grade on an exam.
As study time increases, the exam grade
increases at a decreasing rate
â€«Ù…ØªÙ†Ø§Ù‚Øµâ€¬
For example, the second hour of study
increased the grade by 4 points (from 6 points
to 10 points), but the ninth hour of study
increases the grade by only 1 point (from 24
points to 25 points).
Figure 1A.7 Nonlinear Relationships (2 of 21 â€« Ø§Ù„Ø´ÙƒÙ„â€¬A.7 )2 â€« Ù…Ù†â€¬2( â€«Ø§Ù„Ø¹Ø§Ù„Ù‚Ø§Øª ØºÙŠØ± Ø§Ù„Ø®Ø·ÙŠØ©â€¬
)
There is a positive and nonlinear relationship
between the quantity of grain produced and
total production cost. As the quantity increases,
the total cost increases at an increasing rate.
.â€«Ù…ØªØ²Ø§ÙŠØ¯â€¬
For example, to increase production from 1 ton
to 2 tons, production cost increases by \$5 (from
\$10 to \$15) but to increase the production from
10 to 11 tons, total cost increases by \$25 (from
\$100 to \$125).
â€« Ø¯ÙˆØ§Ù„Ø±Ø§) ÙˆÙ„ÙƒÙ†â€¬15 â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª Ø¥Ù„Ù‰â€¬10 â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª (Ù…Ù†â€¬5 â€«Ø§Ø¥Ù„Ù†ØªØ§Ø¬ Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬
.)â€« Ø¯ÙˆØ§Ù„Ø±Ø§â€¬125 â€« Ø¯ÙˆØ§Ù„Ø± Ø¥Ù„Ù‰â€¬100 â€« Ø¯ÙˆØ§Ù„Ø±Ø§ (Ù…Ù†â€¬25 â€«Ø¨Ù…Ù‚Ø¯Ø§Ø±â€¬
1A.2 Computing Percentage Changes and Using
Equations
To compute a percentage change, we divide the change in
the variable by the initial value of the variable, and then
multiply by 100:
:100
Percentage change =
New value âˆ’ initial value
ï‚´ 100
Initial value
Application 3: The Perils of Percentages (1 of 2)
In the 1970s, the government of Mexico City repainted the highway lane lines on
the Viaducto to transform a four-lane highway into a six-lane highway
â€¢ The government announced that the highway capacity had increased by 50%
(equal to 2 divided by 4)
â€¢ Unfortunately, the number of collisions and traffic fatalities increased, and one
year later the government restored the four-lane highway and announced that
the capacity had decreased by 33% (equal to 2 divided by 6).
â€¢ â€« Ø£Ø¹Ø§Ø¯Øªâ€¬ØŒâ€« ÙˆØ¨Ø¹Ø¯ Ù…Ø±ÙˆØ± Ø¹Ø§Ù… ÙˆØ§Ø­Ø¯â€¬ØŒâ€« Ø²Ø§Ø¯ Ø¹Ø¯Ø¯ Ø­ÙˆØ§Ø¯Ø« Ø§Ù„ØªØµØ§Ø¯Ù… ÙˆØ§Ù„ÙˆÙÙŠØ§Øª Ø§Ù„Ù†Ø§Ø¬Ù…Ø© Ø¹Ù† Ø­Ø±ÙƒØ© Ø§Ù„Ù…Ø±ÙˆØ±â€¬ØŒâ€«ÙˆÙ„Ø³ÙˆØ¡ Ø§Ù„Ø­Ø¸â€¬
.)6 â€« Ù…Ù‚Ø³ÙˆÙ…ÙŠÙ† Ø¹Ù„Ù‰â€¬2 â€«Ù…Ø§ ÙŠØ¹Ø§Ø¯Ù„â€¬
Application 3: The Perils of Percentages (2 of 2)
This anecdote reveals a potential problem with using the simple approach to
compute percentage changes. Because the initial value (the denominator)
changes, the computation of percentage increases and decreases are not
symmetric.
There is a solution to this problem: using the midpoint method for percentage
changes:
Percentage change =
New value âˆ’ initial value
ï‚´ 100
Average value
Using Equations to Compute Missing Values (1 of 2)
â€«(Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ù„Ù…Ø¹Ø§Ø¯Ø§Ù„Øª Ù„Ø­Ø³Ø§Ø¨ Ø§Ù„Ù‚ÙŠÙ… Ø§Ù„Ù…ÙÙ‚ÙˆØ¯Ø©â€¬1 â€«Ù…Ù†â€¬2)
It will often be useful to compute the value of the numerator or the denominator
of an equation. For example, if we know the change in work hours, and the slope
of the line relating change in income and change in work hours:
â€« Ø¥Ø°Ø§ ÙƒÙ†Ø§ Ù†Ø¹Ø±Ù Ø§Ù„ØªØºÙŠØ±â€¬ØŒâ€« Ø¹Ù„Ù‰ Ø³Ø¨ÙŠÙ„ Ø§Ù„Ù…Ø«Ø§Ù„â€¬.â€«Ø³ÙŠÙƒÙˆÙ† Ù…Ù† Ø§Ù„Ù…ÙÙŠØ¯ ÙÙŠ ÙƒØ«ÙŠØ± Ù…Ù† Ø§Ø£Ù„Ø­ÙŠØ§Ù† Ø­Ø³Ø§Ø¨ Ù‚ÙŠÙ…Ø© Ø§Ù„Ø¨Ø³Ø· Ø£Ùˆ Ù…Ù‚Ø§Ù… Ø§Ù„Ù…Ø¹Ø§Ø¯Ù„Ø©â€¬
:â€« ÙˆÙ…ÙŠÙ„ Ø§Ù„Ø®Ø· Ø§Ù„Ù…ØªØ¹Ù„Ù‚ Ø¨Ø§Ù„ØªØºÙŠÙŠØ± ÙÙŠ Ø§Ù„Ø¯Ø®Ù„ ÙˆØ§Ù„ØªØºÙŠÙŠØ± ÙÙŠ Ø³Ø§Ø¹Ø§Øª Ø§Ù„Ø¹Ù…Ù„â€¬ØŒâ€«ÙÙŠ Ø³Ø§Ø¹Ø§Øª Ø§Ù„Ø¹Ù…Ù„â€¬
Slope =
ï„Work hours ï‚´ Slope = ï„Income
ï„Income
ï„Work hours
ï„Income = ï„Work hours ï‚´ Slope
Using Equations to Compute Missing
Values (2 of 2))2 â€« Ù…Ù†â€¬2( â€«Ø§Ø³ØªØ®Ø¯Ø§Ù… Ø§Ù„Ù…Ø¹Ø§Ø¯Ø§Ù„Øª Ù„Ø­Ø³Ø§Ø¨ Ø§Ù„Ù‚ÙŠÙ… Ø§Ù„Ù…ÙÙ‚ÙˆØ¯Ø©â€¬
ï„Income = ï„Work hours ï‚´ Slope
Then, if you work seven extra hours, and the slope of this line is \$8 per hour,
then your change in income is:
â€« Ø«Ù… Ø§Ù„ØªØºÙŠÙŠØ± ÙÙŠ Ø§Ù„Ø¯Ø®Ù„â€¬ØŒâ€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª ÙÙŠ Ø§Ù„Ø³Ø§Ø¹Ø©â€¬8 â€« ÙˆÙ…ÙŠÙ„ Ù‡Ø°Ø§ Ø§Ù„Ø®Ø· Ù‡Ùˆâ€¬ØŒâ€« Ø¥Ø°Ø§ ÙƒÙ†Øª ØªØ¹Ù…Ù„ Ø³Ø¨Ø¹ Ø³Ø§Ø¹Ø§Øª Ø¥Ø¶Ø§ÙÙŠØ©â€¬ØŒâ€«Ø«Ù…â€¬
:â€«Ø§Ù„Ø®Ø§Øµ Ø¨Ùƒ Ù‡Ùˆâ€¬
ï„Income = 7 hours ï‚´ \$8per hour
ï„Income = \$56
Negative relationship
Positive relationship
â€«Ù…ÙŠÙ„ Ù…Ù†Ø­Ù†Ù‰â€¬
Slope of a curve
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Survey of Economics: Principles,
Applications and Tools
Eighth Edition
Chapter 2
The Key Principles of
Economics
Chapter Outline
2.1 The Principle of Opportunity Cost
2.2 The Marginal Principle
2.3 The Principle of Voluntary Exchange
2.4 The Principle of Diminishing Returns
2.5 The Real-Nominal Principle
Economics is all about making choices; to make good choices, we must
compare the benefit of something to its cost.
â€«Ø¥Ù† Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ Ù‡Ùˆ ÙƒÙ„ Ø´ÙŠØ¡ Ø¹Ù† Ø§ØªØ®Ø§Ø° Ø§Ù„Ø®ÙŠØ§Ø±Ø§ØªØ› Ø¨Ù„ Ù‡Ùˆ Ø£Ù…Ø± Ø§Ù„ ÙŠÙ…ÙƒÙ† Ø£Ù† ÙŠÙƒÙˆÙ† Ù„Ù‡ Ø£ÙŠ Ø´Ùƒ ÙÙŠ Ø£Ù† Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯â€¬
Opportunity Cost: What you sacrifice to get something.
â€œThere is no such thing as a free lunchâ€
Jack left a job paying \$60,000 per year to start his own florist
shop in a building he owns. The market value of the building
is \$80,000. He pays \$30,000 per year for flowers and otherâ€‹
supplies, and has a bank account that pays 5 percent
interest. What is the economic cost ofâ€‹ Jack’s business?
â€«ÙˆØ¸ÙŠÙØ© Ø¯ÙØ¹ )Ø¬Ø§Ùƒ(ØªØ±Ùƒâ€¬60 â€«Ø£Ù„Ù Ø¯ÙˆØ§Ù„Ø± Ø³Ù†ÙˆÙŠØ§ Ù„ÙŠØ¨Ø¯Ø£ Ù…ØªØ¬Ø±Ù‡ Ø§Ù„Ø®Ø§Øµ Ù„Ø¨ÙŠØ¹ Ø§Ù„Ø²Ù‡ÙˆØ± ÙÙŠ Ù…Ø¨Ù†Ù‰ ÙŠÙ…Ù„ÙƒÙ‡ ØªØ¨Ù„Øº Ø§Ù„Ù‚ÙŠÙ…Ø©â€¬
â€«Ø§Ù„Ø³ÙˆÙ‚ÙŠØ© Ù„Ù„Ù…Ø¨Ù†Ù‰â€¬80,000 â€«Ø¯ÙˆØ§Ù„Ø±â€¬. â€«ÙˆÙ‡Ùˆ ÙŠØ¯ÙØ¹â€¬30 ØŒâ€«Ø£Ù„Ù Ø¯ÙˆØ§Ù„Ø± Ø³Ù†ÙˆÙŠØ§ Ù…Ù‚Ø§Ø¨Ù„ Ø§Ù„Ø²Ù‡ÙˆØ± ÙˆØºÙŠØ±Ù‡Ø§ Ù…Ù† Ø§Ø¥Ù„Ù…Ø¯Ø§Ø¯Ø§Øªâ€¬
The Cost of Military Spending
The war in Iraq cost the United States an estimated \$1 trillion. Each \$100 billion
could:
:â€« Ù…Ù„ÙŠØ§Ø± Ø¯ÙˆØ§Ù„Ø± ÙŠÙ…ÙƒÙ† Ø£Ù†â€¬100 â€« ÙƒÙ„â€¬.â€«Ø§Ù„Ø­Ø±Ø¨ ÙÙŠ Ø§Ù„Ø¹Ø±Ø§Ù‚ ÙƒÙ„ÙØª Ø§Ù„ÙˆØ§Ù„ÙŠØ§Øª Ø§Ù„Ù…ØªØ­Ø¯Ø© Ù…Ø§ ÙŠÙ‚Ø¯Ø± Ø¨ØªØ±ÙŠÙ„ÙŠÙˆÙ† Ø¯ÙˆØ§Ù„Ø±â€¬
â€¢ Enroll 13 million preschool children in the Head Start program for one year
â€¢ Hire 1.8 million additional teachers for one year.
.â€« Ù…Ù„ÙŠÙˆÙ† Ù…Ø¹Ù„Ù… Ø¥Ø¶Ø§ÙÙŠ Ù„Ù…Ø¯Ø© Ø¹Ø§Ù… ÙˆØ§Ø­Ø¯â€¬1.8 â€«ØªÙˆØ¸ÙŠÙâ€¬
â€¢ Immunize all the children in less-developed countries for the next 33 years.
â€« Ø§Ù„Ù…Ù‚Ø¨Ù„Ø©â€¬33 â€«ØªØ­ØµÙŠÙ† Ø¬Ù…ÙŠØ¹ Ø§Ø£Ù„Ø·ÙØ§Ù„ ÙÙŠ Ø§Ù„Ø¨Ù„Ø¯Ø§Ù† Ø§Ø£Ù„Ù‚Ù„ Ù†Ù…ÙˆØ§ Ù„Ù„Ø³Ù†ÙˆØ§Øª Ø§Ù„Ù€â€¬
The true cost of the war was its opportunity cost: what the United States
sacrificed for it.
Figure 2.1 Scarcity and the Production Possibilities Curve (1 of 3)
â€«Ø§Ù„Ø´ÙƒÙ„â€¬2.1 â€«(Ø§Ù„Ù†Ø¯Ø±Ø© ÙˆÙ…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬1 â€«Ù…Ù†â€¬3)
Production possibilities
curve: A curve that shows
the possible combinations
of products that an
economy can produce,
given that its productive
resources are fully
employed and efficiently
used.
â€«Ù…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬: â€«Ù…Ù†Ø­Ù†Ù‰ ÙŠØ¨ÙŠÙ†â€¬
â€« Ø¨Ø§Ù„Ù†Ø¸Ø± Ø¥Ù„Ù‰â€¬ØŒâ€«ÙŠÙ…ÙƒÙ† Ø£Ù† ÙŠÙ†ØªØ¬Ù‡Ø§ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯â€¬
Figure 2.1 Scarcity and the Production Possibilities
Curve (2 of 3) )3 â€« Ù…Ù†â€¬2( â€« Ø§Ù„Ù†Ø¯Ø±Ø© ÙˆÙ…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬1-2 â€«Ø§Ù„Ø´ÙƒÙ„â€¬
The production
possibilities curve
illustrates the principle of
opportunity cost for an
entire economy.
10- â€«ÙˆÙŠÙˆØ¶Ù‘Ø­ Ù…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬ Ù…Ø¨Ø¯Ø£â€¬
â€« ÙØ¥Ù† Ø²ÙŠØ§Ø¯Ø©â€¬ØŒâ€«ØªÙ… ØªÙˆØ¸ÙŠÙ Ù‡Ø°Ù‡ Ø§Ù„Ù…ÙˆØ§Ø±Ø¯ Ø¨Ø§Ù„ÙƒØ§Ù…Ù„â€¬
â€«Ø¥Ù†ØªØ§Ø¬ Ø§Ù„Ù‚Ù…Ø­ ØªØ£ØªÙŠ Ø¹Ù„Ù‰ Ø­Ø³Ø§Ø¨ Ø§Ù„ØµÙ„Ø¨â€¬.
An economy has a fixed
amount of resources. If
these resources are fully
employed, an increase in
the production of wheat
comes at the expense of
steel.
Figure 2.1 Scarcity and the Production Possibilities
Curve (3 of 3) )3 â€« Ù…Ù†â€¬3( â€« Ø§Ù„Ù†Ø¯Ø±Ø© ÙˆÙ…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬1-2 â€«Ø§Ù„Ø´ÙƒÙ„â€¬
wheat requires sacrificing
progressively more steelâ€”
50 tons from a to b, 180
tons from c to d.
â€«ÙƒÙ„â€¬10 â€«Ø£Ø·Ù†Ø§Ù† Ø¥Ø¶Ø§ÙÙŠØ© Ù…Ù† Ø§Ù„Ù‚Ù…Ø­ ÙŠØªØ·Ù„Ø¨â€¬
â€«Ø§Ù„ØªØ¶Ø­ÙŠØ© ØªØ¯Ø±ÙŠØ¬ÙŠØ§ Ø¨Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„ØµÙ„Ø¨â€¬- 50
ØŒâ€«Ø·Ù†Ø§ Ù…Ù† Ø£ Ø¥Ù„Ù‰ Ø¨â€¬180 â€«Ø·Ù†Ø§ Ù…Ù† Ø¬ Ø¥Ù„Ù‰ Ø¯â€¬.
ØŒâ€«ÙˆØ¨Ø¹Ø¶ Ø§Ù„Ù…ÙˆØ§Ø±Ø¯ Ø£ÙƒØ«Ø± Ù…Ø§Ù„Ø¡Ù…Ø© Ø¥Ù„Ù†ØªØ§Ø¬ Ø§Ù„ØµÙ„Ø¨â€¬
Some resources are better
suited for steel production,
and some are better suited
to wheat production.
Figure 2.2 Shifting the Production Possibilities Curve
â€«Ø§Ù„Ø´ÙƒÙ„â€¬2.2 â€«ØªØ­ÙˆÙŠÙ„ Ù…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
An increase in the quantity
of resources or
technological innovation in
an economy shifts the
production possibilities
curve outward.
â€«Ø§Ù„ØªÙƒÙ†ÙˆÙ„ÙˆØ¬ÙŠ ÙÙŠ Ø§Ù‚ØªØµØ§Ø¯ Ù…Ø§ ØªØ­ÙˆÙ„ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
â€«Ø¥Ù„Ù‰ Ø§Ù„Ø®Ø§Ø±Ø¬â€¬.
â€«)Ù†Ù‚Ø§Ø· Ø¨ÙŠÙ† Ø² Ùˆ Ø­(Ø£Ùˆ Ø£ÙƒØ«Ø± Ù…Ù† ÙƒÙ„ Ù…Ù† Ø§Ù„Ø³Ù„Ø¹â€¬.
Starting from point f, a
nation could produce more
steel (point g), more wheat
(point h), or more of both
goods (points between g
and h).
2.2 The Marginal Principle â€« Ø§Ù„Ù…Ø¨Ø¯Ø£ Ù‡Ø§Ù…Ø´ÙŠÙ‘Ø©â€¬2.2
Apply the marginal principle. .â€«ØªØ·Ø¨ÙŠÙ‚ Ø§Ù„Ù…Ø¨Ø¯Ø£ Ø§Ù„Ù‡Ø§Ù…Ø´ÙŠâ€¬
We rarely make all-or-nothing choices. Economists tend to think in marginal terms: the
effect of a small or incremental change.
â€« ØªØ£Ø«ÙŠØ± ØªØºÙŠÙŠØ±â€¬:â€« ÙŠÙ…ÙŠÙ„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠÙˆÙ† Ø¥Ù„Ù‰ Ø§Ù„ØªÙÙƒÙŠØ± Ø¨Ø¹Ø¨Ø§Ø±Ø§Øª Ù‡Ø§Ù…Ø´ÙŠØ©â€¬.â€«Ù†Ø­Ù† Ù†Ø§Ø¯Ø±Ø§ Ù…Ø§ ØªØ¬Ø¹Ù„ ÙƒÙ„ Ø´ÙŠØ¡ Ø£Ùˆ Ø§Ù„ Ø´ÙŠØ¡ Ø§Ù„Ø®ÙŠØ§Ø±Ø§Øªâ€¬
â€«ØµØºÙŠØ± Ø£Ùˆ ØªØ¯Ø±ÙŠØ¬ÙŠâ€¬
Marginal benefit: The additional benefit resulting from a small increase in some activity.
Marginal cost: The additional cost resulting from a small increase in some activity.
The marginal principle: Increase the level of an activity as long as its marginal benefit
exceeds its marginal cost. Choose the level at which the marginal benefit equals the
marginal cost.
Application 2: Hiring people â€« ØªÙˆØ¸ÙŠÙ Ø§Ø£Ù„Ø´Ø®Ø§Øµâ€¬:2 â€«Ø§Ù„ØªØ·Ø¨ÙŠÙ‚â€¬
1) The table below shows the marginal benefit that Khaled earns from keeping his store
open one more hour. Khaled has a marginal cost of \$40 per hour. Khaled stays open
20 hours.
a) Do you think Khaledâ€™s decision to stay open 20 hours is optimal? Why? (1 mark)
b) How many hours do you advise Khaled to stay open? Why? (2 marks)
2.3 The Principle of Voluntary Exchange â€« Ù…Ø¨Ø¯Ø£ Ø§Ù„ØªØ¨Ø§Ø¯Ù„ Ø§Ù„Ø·ÙˆØ¹ÙŠâ€¬3-2
Apply the principle of voluntary exchange. â€«ØªØ·Ø¨ÙŠÙ‚ Ù…Ø¨Ø¯Ø£ Ø§Ù„ØªØ¨Ø§Ø¯Ù„ Ø§Ù„Ø·ÙˆØ¹ÙŠâ€¬
Why would two people trade with one another?
â€«Ù„Ù…Ø§Ø°Ø§ Ø´Ø®ØµÙŠÙ† ÙŠØªØ§Ø¬Ø±Ø§Ù† Ù…Ø¹ Ø¨Ø¹Ø¶Ù‡Ù…Ø§ Ø§Ù„Ø¨Ø¹Ø¶ØŸâ€¬
Because each believes that what they receive is worth more to them than what
they give.
.â€«Ø£Ù„Ù† ÙƒÙ„ ÙŠØ¹ØªÙ‚Ø¯ Ø£Ù† Ù…Ø§ ÙŠØªÙ„Ù‚ÙˆÙ†Ù‡ ÙŠØ³ØªØ­Ù‚ Ù„Ù‡Ù… Ø£ÙƒØ«Ø± Ù…Ù…Ø§ ÙŠØ¹Ø·ÙˆÙ†Ù‡â€¬
The principle of voluntary exchange: A voluntary exchange between two
people makes both better off
.â€« Ø§Ù„ØªØ¨Ø§Ø¯Ù„ Ø§Ù„Ø·ÙˆØ¹ÙŠ Ø¨ÙŠÙ† Ø´Ø®ØµÙŠÙ† ÙŠØ¬Ø¹Ù„ ÙƒÙ„ÙŠÙ‡Ù…Ø§ Ø£ÙØ¶Ù„ Ø­Ø§Ø§Ù„â€¬:â€«Ù…Ø¨Ø¯Ø£ Ø§Ù„ØªØ¨Ø§Ø¯Ù„ Ø§Ù„Ø·ÙˆØ¹ÙŠâ€¬.
Example: When you work, you trade your time for money. The money is more
valuable than the time to you, and your time is more valuable than the money to
â€« ÙˆÙˆÙ‚ØªÙƒ Ø£ÙƒØ«Ø± Ù‚ÙŠÙ…Ø© Ù…Ù† Ø§Ù„Ù…Ø§Ù„â€¬ØŒ â€« Ø§Ù„Ù…Ø§Ù„ Ø£ÙƒØ«Ø± Ù‚ÙŠÙ…Ø© Ù…Ù† Ø§Ù„ÙˆÙ‚Øª Ø¨Ø§Ù„Ù†Ø³Ø¨Ø© Ù„Ùƒâ€¬.â€« ØªÙ‚Ø§ÙŠØ¶ ÙˆÙ‚ØªÙƒ Ø¨Ø§Ù„Ù…Ø§Ù„â€¬ØŒâ€« Ø¹Ù†Ø¯Ù…Ø§ ØªØ¹Ù…Ù„â€¬:â€«Ù…Ø«Ø§Ù„â€¬
â€«Ù„ØµØ§Ø­Ø¨ Ø§Ù„Ø¹Ù…Ù„ Ø§Ù„Ø®Ø§Øµ Ø¨Ùƒâ€¬
2.4 The Principle of Diminishing Returns â€« Ù…Ø¨Ø¯Ø£ ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øªâ€¬2.4
Apply the principle of diminishing returns. .â€«ØªØ·Ø¨ÙŠÙ‚ Ù…Ø¨Ø¯Ø£ ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øªâ€¬
You run a small copy shop with one copying machine and one worker, who can
copy 500 pages per hour.
You add another worker, but output increases to only 800 pages per hour, not
doubling to 1,000.
Why? They now share the copier, so each is less productive.
.â€« Ø¨Ø­ÙŠØ« ÙŠÙƒÙˆÙ† ÙƒÙ„ Ù…Ù†Ù‡Ø§ Ø£Ù‚Ù„ Ø¥Ù†ØªØ§Ø¬ÙŠØ©â€¬ØŒâ€«Ù„Ù…ØŸ ÙˆÙ‡Ù… Ø§Ø¢Ù„Ù† ÙŠØ´ØªØ±ÙƒÙˆÙ† ÙÙŠ Ø¢Ù„Ø© Ø§Ù„Ù†Ø³Ø®â€¬
The principle of diminishing returns: Suppose output is produced with two or
more inputs, and we increase one input while holding the other input or inputs
fixed. Beyond some pointâ€”called the point of diminishing returnsâ€”output will
increase at a decreasing rate.
â€« ÙˆÙ†Ø²ÙŠØ¯ Ù…Ø¯Ø®Ø§Ù„ ÙˆØ§Ø­Ø¯Ø§ Ø¨ÙŠÙ†Ù…Ø§ Ù†Ù…Ø³Ùƒ Ø¨Ø§Ù„Ù…Ø¯Ø®Ø§Ù„Øª Ø§Ø£Ù„Ø®Ø±Ù‰ Ø£Ùˆâ€¬ØŒâ€« Ø§ÙØªØ±Ø¶ Ø£Ù† Ø§Ù„Ù†Ø§ØªØ¬ ÙŠÙ†ØªØ¬ Ø¨Ù…Ø¯Ø®Ù„ÙŠÙ† Ø£Ùˆ Ø£ÙƒØ«Ø±â€¬:â€«Ù…Ø¨Ø¯Ø£ ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øªâ€¬
.â€« Ø³ÙŠØ²Ø¯Ø§Ø¯ Ø§Ù„Ù†Ø§ØªØ¬ Ø¨Ù…Ø¹Ø¯Ù„ Ù…ØªÙ†Ø§Ù‚Øµâ€¬- â€« ØªØ³Ù…Ù‰ Ù†Ù‚Ø·Ø© ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øªâ€¬- â€« ÙˆØ¥Ù„Ù‰ Ù…Ø§ Ø¨Ø¹Ø¯ Ù†Ù‚Ø·Ø© Ù…Ø§â€¬.â€«Ø§Ù„Ù…Ø¯Ø®Ø§Ù„Øª Ø§Ù„Ø«Ø§Ø¨ØªØ©â€¬
Why Do Diminishing Returns Occur? â€«Ù„Ù…Ø§Ø°Ø§ ØªØ­Ø¯Ø« Ø§Ù„Ø¹ÙˆØ§Ø¦Ø¯ Ø§Ù„Ù…ØªÙ†Ø§Ù‚ØµØ©ØŸâ€¬
Diminishing returns occurs because one of the inputs to the production process is
fixed.
When a firm can vary all its inputs, including the size of the production facility, the
principle of diminishing returns is not relevant.
â€« ÙØ¥Ù† Ù…Ø¨Ø¯Ø£ ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øª Ù„ÙŠØ³â€¬ØŒâ€« Ø¨Ù…Ø§ ÙÙŠ Ø°Ù„Ùƒ Ø­Ø¬Ù… Ù…Ø±ÙÙ‚ Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬ØŒâ€«ÙˆØ¹Ù†Ø¯Ù…Ø§ ØªØ³ØªØ·ÙŠØ¹ Ø´Ø±ÙƒØ© Ù…Ø§ Ø£Ù† ØªØªÙØ§ÙˆØª Ø¬Ù…ÙŠØ¹ Ù…Ø¯Ø®Ø§Ù„ØªÙ‡Ø§â€¬
If you doubled both the number of workers and equipment, output ought to
double alsoâ€”or maybe more than double, if specialization is beneficial.
â€« Ø¥Ø°Ø§ ÙƒØ§Ù† Ø§Ù„ØªØ®ØµØµâ€¬ØŒâ€« ÙŠØ¬Ø¨ Ø£Ù† ÙŠØªØ¶Ø§Ø¹Ù Ø§Ù„Ù†Ø§ØªØ¬ Ø£ÙŠØ¶Ø§ â€” Ø£Ùˆ Ø±Ø¨Ù…Ø§ Ø£ÙƒØ«Ø± Ù…Ù† Ø¶Ø¹Ùâ€¬ØŒâ€«Ø¥Ø°Ø§ Ø¶Ø§Ø¹ÙØª Ø¹Ø¯Ø¯ Ø§Ù„Ø¹Ù…Ø§Ù„ ÙˆØ§Ù„Ù…Ø¹Ø¯Ø§Øªâ€¬
.â€«Ù…ÙÙŠØ¯Ø§â€¬
Application 4: Fertilizer and Crop Yields â€« Ø§Ø£Ù„Ø³Ù…Ø¯Ø© ÙˆØºØ§Ù„Øª Ø§Ù„Ù…Ø­Ø§ØµÙŠÙ„â€¬:4 â€«Ø§Ù„ØªØ·Ø¨ÙŠÙ‚â€¬
Adding fertilizer to a field increases its production; but this is subject to
diminishing returns.
.â€«Ø¥Ø¶Ø§ÙØ© Ø§Ø£Ù„Ø³Ù…Ø¯Ø© Ø¥Ù„Ù‰ Ø­Ù‚Ù„ ÙŠØ²ÙŠØ¯ Ù…Ù† Ø¥Ù†ØªØ§Ø¬Ù‡Ø› ÙˆÙ„ÙƒÙ† Ù‡Ø°Ø§ ÙŠØ®Ø¶Ø¹ Ù„ØªÙ†Ø§Ù‚Øµ Ø§Ù„Ø¹Ø§Ø¦Ø¯Ø§Øªâ€¬
Why? The other inputs to the production process are fixed, such as the field
itself, the rain, the sunlight, etc. Each additional bag of fertilizer is
progressively less productive.
â€« ÙƒÙ„ ÙƒÙŠØ³â€¬.â€« Ø§Ù„Ø®â€¬ØŒâ€« ÙˆØ£Ø´Ø¹Ø© Ø§Ù„Ø´Ù…Ø³â€¬ØŒâ€« ÙˆØ§Ù„Ù…Ø·Ø±â€¬ØŒâ€« Ù…Ø«Ù„ Ø§Ù„Ø­Ù‚Ù„ Ù†ÙØ³Ù‡â€¬ØŒâ€«Ù„Ù…ØŸ ÙŠØªÙ… Ø¥ØµØ§Ù„Ø­ Ø§Ù„Ù…Ø¯Ø®Ø§Ù„Øª Ø§Ø£Ù„Ø®Ø±Ù‰ Ù„Ø¹Ù…Ù„ÙŠØ© Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
Some representative numbers are on the next slide
.
Table 2.1 Fertilizer and Corn Yield
Bushels of Corn per Acre
Bags of Nitrogen Fertilizer
0
85
1
120
2
135
3
144
4
147
The first bag of fertilizer increases production by 35 bushels, but subsequent
bags of fertilizer increase production by less and less.
2.5 The Real-Nominal Principle â€« Ø§Ù„Ù…Ø¨Ø¯Ø£ Ø§Ù„Ø­Ù‚ÙŠÙ‚ÙŠ Ø§Ø§Ù„Ø³Ù…ÙŠâ€¬2.5
Apply the real-nominal principle. .â€«ØªØ·Ø¨ÙŠÙ‚ Ø§Ù„Ù…Ø¨Ø¯Ø£ Ø§Ø§Ù„Ø³Ù…ÙŠ Ø§Ù„Ø­Ù‚ÙŠÙ‚ÙŠâ€¬
Most modern money is not inherently valuable, but is valuable because of what it
â€« ÙˆÙ„ÙƒÙ†Ù‡Ø§ Ù‚ÙŠÙ…Ø© Ø¨Ø³Ø¨Ø¨ Ù…Ø§ Ø³ØªØ´ØªØ±ÙŠÙ‡â€¬ØŒ â€«Ù…Ø¹Ø¸Ù… Ø§Ù„Ù…Ø§Ù„ Ø§Ù„Ø­Ø¯ÙŠØ« Ù„ÙŠØ³Øª Ø°Ø§Øª Ù‚ÙŠÙ…Ø© Ø¨Ø·Ø¨ÙŠØ¹ØªÙ‡Ø§â€¬
The real-nominal principle: What matters to people is the real value of money
or incomeâ€”its purchasing powerâ€”not its face value.
Nominal value: The face value of an amount of money
Real value: The value of an amount of money in terms of what it can buy.
Table 2.2 The Real Value of the Minimum Wage, 1974â€“2015 â€« Ø§Ù„Ù‚ÙŠÙ…Ø© Ø§Ù„Ø­Ù‚ÙŠÙ‚ÙŠØ© Ù„Ù„Ø­Ø¯â€¬2-2 â€«Ø§Ù„Ø¬Ø¯ÙˆÙ„â€¬
2015-1974 ØŒâ€«Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ±â€¬
Blank
1974
2015
Minimum wage per hour
\$2.00
\$7.25
â€«Ø§Ù„Ø¯Ø®Ù„ Ø§Ø£Ù„Ø³Ø¨ÙˆØ¹ÙŠ Ù…Ù† Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ±â€¬
Weekly income from minimum wage
80
290
47
236
1.70
1.23
â€«Ø¹Ø¯Ø¯ Ø§Ù„Ø³Ø§Ù„Øª ÙÙŠ Ø§Ø£Ù„Ø³Ø¨ÙˆØ¹â€¬
Between 1974 and 2015, the federal minimum wage increased from \$2.00 to
\$7.25.
â€« Ø¯ÙˆØ§Ù„Ø±â€¬7.25 â€« Ø¯ÙˆØ§Ù„Ø± Ø¥Ù„Ù‰â€¬2.00 â€« Ø§Ø±ØªÙØ¹ Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ± Ø§Ø§Ù„ØªØ­Ø§Ø¯ÙŠØ© Ù…Ù†â€¬ØŒ2015 â€« Ùˆâ€¬1974 â€«Ø¨ÙŠÙ† Ø¹Ø§Ù…ÙŠâ€¬
Was the typical minimum-wage worker better or worse off in 2015?
â€«ØŸâ€¬2015 â€«Ù‡Ù„ ÙƒØ§Ù† Ø§Ù„Ø¹Ø§Ù…Ù„ Ø§Ù„Ù†Ù…ÙˆØ°Ø¬ÙŠ Ù„Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ± Ø£ÙØ¶Ù„ Ø£Ùˆ Ø£Ø³ÙˆØ£ Ø­Ø§Ø§Ù„ ÙÙŠ Ø¹Ø§Ù…â€¬
We can apply the real-nominal principle to see that the value of the minimum wage has
actually decreased over this time period.
.â€«ÙŠÙ…ÙƒÙ†Ù†Ø§ ØªØ·Ø¨ÙŠÙ‚ Ø§Ù„Ù…Ø¨Ø¯Ø£ Ø§Ø§Ù„Ø³Ù…ÙŠ Ø§Ù„Ø­Ù‚ÙŠÙ‚ÙŠ Ù„Ù†Ø±Ù‰ Ø£Ù† Ù‚ÙŠÙ…Ø© Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø£Ù„Ø¬ÙˆØ± Ù‚Ø¯ Ø§Ù†Ø®ÙØ¶Øª Ø¨Ø§Ù„ÙØ¹Ù„ Ø®Ø§Ù„Ù„ Ù‡Ø°Ù‡ Ø§Ù„ÙØªØ±Ø© Ø§Ù„Ø²Ù…Ù†ÙŠØ©â€¬
Application 5: Repaying Student Loans â€« Ø³Ø¯Ø§Ø¯ Ø§Ù„Ù‚Ø±ÙˆØ¶ Ø§Ù„Ø·Ø§Ù„Ø¨ÙŠØ©â€¬:5 â€«Ø§Ù„Ø·Ù„Ø¨â€¬
Suppose you finish college with \$40,000 in student loans and start a job
that pays a salary of \$50,000 in the first year. In 10 years, you must repay
your college loans. Which would you prefer, stable prices, rising prices, or
falling prices?
ØŒâ€« Ø£ÙŠÙ‡Ù…Ø§ ØªÙØ¶Ù„â€¬.â€« ÙŠØ¬Ø¨ Ø¹Ù„ÙŠÙƒ Ø³Ø¯Ø§Ø¯ Ù‚Ø±ÙˆØ¶Ùƒ Ø§Ù„Ø¬Ø§Ù…Ø¹ÙŠØ©â€¬ØŒâ€« Ø³Ù†ÙˆØ§Øªâ€¬10 â€« ÙÙŠâ€¬.â€« Ø¯ÙˆØ§Ù„Ø± ÙÙŠ Ø§Ù„Ø³Ù†Ø© Ø§Ø£Ù„ÙˆÙ„Ù‰â€¬50,000
â€« Ø£Ùˆ Ù‡Ø¨ÙˆØ· Ø§Ø£Ù„Ø³Ø¹Ø§Ø±ØŸâ€¬ØŒâ€« Ø§Ø±ØªÙØ§Ø¹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø±â€¬ØŒâ€«Ø§Ø³ØªÙ‚Ø±Ø§Ø± Ø§Ø£Ù„Ø³Ø¹Ø§Ø±â€¬
Hint: The nominal value of the loans will not change, even as prices
change.
Key Terms â€«Ø´Ø±ÙˆØ· Ø§Ù„Ù…ÙØªØ§Ø­â€¬
Marginal benefit
Marginal cost
Opportunity cost
Production possibilities curve
â€«Ù…Ù†Ø­Ù†Ù‰ Ø¥Ù…ÙƒØ§Ù†ÙŠØ§Øª Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
Nominal value
Real value
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â€«â€ªSurvey of Economics: Principles,â€¬â€¬
â€«â€ªApplications and Toolsâ€¬â€¬
â€«â€ªEighth Editionâ€¬â€¬
â€«â€ªChapter 3â€¬â€¬
â€«â€ªDemand, Supply, andâ€¬â€¬
â€«â€ªMarket Equilibriumâ€¬â€¬
â€«ÙˆØµÙ ÙˆØ´Ø±Ø­ Ù‚Ø§Ù†ÙˆÙ† Ø§Ù„Ø·Ù„Ø¨ â€ª.â€¬â€¬
â€«ÙÙŠ Ù‡Ø°Ø§ Ø§Ù„ÙØµÙ„ Ø³ÙˆÙ Ù†Ø·ÙˆØ± Ù†Ù…ÙˆØ°Ø¬ Ø§Ù„Ø¹Ø±Ø¶ Ùˆ Ø§Ù„Ø·Ù„Ø¨ â€“ Ø§Ù‡Ù… Ø§Ø¯Ø§Ù‡ Ù„Ù„ØªØ­Ù„ÙŠÙ„ Ø§Ø§Ù„Ù‚ØªØµØ§Ø¯ÙŠ â€ª.â€¬â€¬
â€«Ø³Ù†ÙØªØ±Ø¶ Ø§Ù† Ø§Ø£Ù„Ø³ÙˆØ§Ù‚ ØªÙ†Ø§ÙØ³ÙŠÙ‡ ØªÙ…Ø§Ù…Ø§ â€ª ØŒâ€¬Ù…Ù…Ø§ ÙŠØ¹Ù†ÙŠ Ø§Ù†Ø§ Ø§Ù„Ø¨Ø§Ø¦Ø¹ÙˆÙ† Ø§Ø§Ù„ÙØ±Ø§Ø¯ ØµØºØ§Ø± Ø¬Ø¯Ø§ ÙˆØ§Ù„ ÙŠÙ…ÙƒÙ†Ù‡Ù… Ø§Ù„ØªØ£Ø«ÙŠØ± Ø¹Ù„Ù‰ Ø³Ø¹Ø± Ø§Ù„Ø³ÙˆÙ‚ â€ª.â€¬â€¬
â€«Ø³ÙˆÙ‚ ØªÙ†Ø§ÙØ³ÙŠ ØªÙ…Ø§Ù…Ø§ â€ª :â€¬Ø³ÙˆÙ‚ Ø¨Ù‡ Ø§Ù„Ø¹Ø¯ÙŠØ¯ Ù…Ù† Ø§Ù„Ù…Ø´ØªØ±ÙŠÙŠÙ† ÙˆØ§Ù„Ø¨Ø§Ø¦Ø¹ÙˆÙ† Ù„Ù…Ù†ØªØ¬ Ù…ØªØ¬Ø§Ù†Ø³ ÙˆØ§Ù„ ØªÙˆØ¬Ø¯ Ø¹ÙˆØ§Ø¦Ù‚ Ø§Ù…Ø§Ù… Ø§Ù„Ø¯Ø®ÙˆÙ„â€¬
Consumers and Demand
How much of a particular product are consumers willing to buy during a
particular period? We call this the quantity demanded.
Quantity demanded: The amount of a product that consumers are
What alters the amount consumers are willing to buy? We divide this into
two categories:
â€¢ The price of the product
â€¢ Everything else!
:â€«Ù…Ø§ Ø§Ù„Ø°ÙŠ ÙŠØºÙŠØ± Ø§Ù„Ù…Ø¨Ù„Øº Ø§Ù„Ø°ÙŠ ÙŠØ±ØºØ¨ Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙˆÙ† ÙÙŠ Ø´Ø±Ø§Ø¦Ù‡ØŸ Ù†Ù‚Ø³Ù… Ù‡Ø°Ø§ Ø¥Ù„Ù‰ ÙØ¦ØªÙŠÙ†â€¬
â€«Ø³Ø¹Ø± Ø§Ù„Ù…Ù†ØªØ¬â€¬
! â€«ÙƒÙ„ Ø´ÙŠØ¡ Ø¢Ø®Ø±â€¬
Figure 3.1 The Individual Demand
Curve (1 of 4)
The table shows how many pizzas
a consumer will buy at a selection
of prices. This is a demand
schedule.
Demand schedule: A table that
shows the relationship between the
price of a product and the quantity
demanded, ceteris paribus.
â€«Ø§Ù„Ø¬Ø¯ÙˆÙ„ ÙŠØ¨ÙŠÙ† ÙƒÙ… Ø¹Ø¯Ø¯ Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø§Ù„ØªÙŠ Ø³ÙŠØ´ØªØ±ÙŠÙ‡Ø§ Ø§Ù„Ù…Ø³ØªÙ‡Ù„Ùƒâ€¬
â€« Ø¬Ø¯ÙˆÙ„ ÙŠÙˆØ¶Ø­ Ø§Ù„Ø¹Ø§Ù„Ù‚Ø© Ø¨ÙŠÙ†â€¬:â€«Ù‡Ø°Ø§ Ø¬Ø¯ÙˆÙ„ Ø·Ù„Ø¨ Ø¬Ø¯ÙˆÙ„ Ø§Ù„Ø·Ù„Ø¨â€¬
Figure 3.1 The Individual Demand
Curve (2 of 4)
We plot each of the price-quantity
pairs on the graph; joining those
points gives the individual
demand curve for pizza.
Individual demand curve: A
curve that shows the relationship
between the price of a good and
quantity demanded by an
individual consumer, ceteris
paribus.
â€«Ù†Ù‚ÙˆÙ… Ø¨Ø±Ø³Ù… ÙƒÙ„ Ù…Ù† Ø£Ø²ÙˆØ§Ø¬ Ø§Ù„Ø³Ø¹Ø± Ø§Ù„ÙƒÙ…ÙŠØ© Ø¹Ù„Ù‰ Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ›â€¬
.â€«Ø§Ø§Ù„Ù†Ø¶Ù…Ø§Ù… Ø¥Ù„Ù‰ ØªÙ„Ùƒ Ø§Ù„Ù†Ù‚Ø§Ø· ÙŠØ¹Ø·ÙŠ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø·Ù„Ø¨ Ø§Ù„ÙØ±Ø¯ÙŠØ© Ø¹Ù„Ù‰ Ø§Ù„Ø¨ÙŠØªØ²Ø§â€¬
ceteris paribus. ØŒâ€«ÙˆØ§Ù„ÙƒÙ…ÙŠØ© Ø§Ù„ØªÙŠ ÙŠØ·Ù„Ø¨Ù‡Ø§ Ø§Ù„Ù…Ø³ØªÙ‡Ù„Ùƒ Ø§Ù„ÙØ±Ø¯ÙŠâ€¬
Figure 3.1 The Individual Demand
Curve (3 of 4)
The demand curve slopes
downward; this is so typical,
we call it the law of demand.
Law of demand: There is a
negative relationship between
price and quantity demanded,
ceteris paribus.
ØŒâ€«ÙˆÙŠÙ†Ø­Ø¯Ø± Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø·Ù„Ø¨ Ø¥Ù„Ù‰ Ø§Ø£Ù„Ø³ÙÙ„Ø› Ù‡Ø°Ø§ Ù‡Ùˆ Ù†Ù…ÙˆØ°Ø¬ÙŠ Ø¬Ø¯Ø§â€¬
.â€«ÙˆÙ†Ø­Ù† Ù†Ø³Ù…ÙŠÙ‡Ø§ Ù‚Ø§Ù†ÙˆÙ† Ø§Ù„Ø·Ù„Ø¨â€¬
Figure 3.1 The Individual Demand
Curve (4 of 4)
As price rises from \$8 to \$10, the
consumer buys 3 fewer pizzas. This is
a change in quantity demanded.
Change in quantity demanded: A
change in the quantity consumers are
willing and able to buy when the price
changes; represented graphically by
movement along the demand curve.
â€« ÙŠØ´ØªØ±ÙŠâ€¬ØŒ â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øªâ€¬10 â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª Ø¥Ù„Ù‰â€¬8 â€«Ù…Ø¹ Ø§Ø±ØªÙØ§Ø¹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± Ù…Ù†â€¬
Figure 3.2 From Individual to Market
Demand
Adding quantity demanded by each consumer at each price
gives us the market demand curve.
Market demand curve: A curve showing the relationship
between price and quantity demanded by all consumers,
ceteris paribus.
â€«Ø¥Ø¶Ø§ÙØ© ÙƒÙ…ÙŠØ© ÙŠØ·Ù„Ø¨Ù‡Ø§ ÙƒÙ„ Ù…Ø³ØªÙ‡Ù„Ùƒ ÙÙŠ ÙƒÙ„ Ø³Ø¹Ø± ÙŠØ¹Ø·ÙŠÙ†Ø§ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø·Ù„Ø¨ ÙÙŠâ€¬
.â€«Ø§Ù„Ø³ÙˆÙ‚â€¬
ceteris paribus. ØŒâ€«ÙŠØ·Ù„Ø¨Ù‡Ø§ Ø¬Ù…ÙŠØ¹ Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙŠÙ†â€¬
Application 1: Young Smokers and the
Law of Demand
As price decreases, the quantity of
cigarettes demanded increases for
two reasons:
choose to smoke more; and
â€¢ Some (mostly young) people start
smoking.
Keeping cigarette prices high, or
increasing them with taxes, is one way
that governments try to discourage
young people from starting smoking.
â€« ØªØ²Ø¯Ø§Ø¯ ÙƒÙ…ÙŠØ© Ø§Ù„Ø³Ø¬Ø§Ø¦Ø±â€¬ØŒâ€«Ù…Ø¹ Ø§Ù†Ø®ÙØ§Ø¶ Ø§Ø£Ù„Ø³Ø¹Ø§Ø±â€¬
â€« ÙŠØ®ØªØ§Ø±ÙˆÙ† Ø§Ù„ØªØ¯Ø®ÙŠÙ†â€¬ØŒâ€«Ø§Ù„Ù†Ø§Ø³ Ø§Ù„Ø°ÙŠÙ† ÙŠØ¯Ø®Ù†ÙˆÙ† Ø¨Ø§Ù„ÙØ¹Ù„â€¬
.â€«Ø£ÙƒØ«Ø±â€¬
â€«Ùˆ Ø¨Ø¹Ø¶ Ø§Ù„Ù†Ø§Ø³ (Ù…Ø¹Ø¸Ù…Ù‡Ù… Ù…Ù† Ø§Ù„Ø´Ø¨Ø§Ø¨) ÙŠØ¨Ø¯Ø£ÙˆÙ†â€¬
.â€«Ø§Ù„ØªØ¯Ø®ÙŠÙ†â€¬
â€« Ø£Ùˆ Ø²ÙŠØ§Ø¯ØªÙ‡Ø§â€¬ØŒâ€«Ø¥Ù† Ø¥Ø¨Ù‚Ø§Ø¡ Ø£Ø³Ø¹Ø§Ø± Ø§Ù„Ø³Ø¬Ø§Ø¦Ø± Ù…Ø±ØªÙØ¹Ø©â€¬
â€« Ù‡Ùˆ Ø¥Ø­Ø¯Ù‰ Ø§Ù„Ø·Ø±Ù‚ Ø§Ù„ØªÙŠ ØªØ­Ø§ÙˆÙ„ Ø§Ù„Ø­ÙƒÙˆÙ…Ø§Øªâ€¬ØŒâ€«Ø¨Ø§Ù„Ø¶Ø±Ø§Ø¦Ø¨â€¬
.â€«Ù…Ù†Ø§ÙÙ‡Ø§ Ø«Ù†ÙŠ Ø§Ù„Ø´Ø¨Ø§Ø¨ Ø¹Ù† Ø¨Ø¯Ø¡ Ø§Ù„ØªØ¯Ø®ÙŠÙ†â€¬
3.2 The Supply Curve
Describe and explain the law of supply.
How much of a particular product are firms willing to produce
and sell during a particular period? We call this the quantity
supplied.
Quantity supplied: The amount of a product that firms are
willing and able to sell.
What alters the amount firms are willing to sell? We divide this
into two categories:
â€«Ù…Ø§ Ù‡Ùˆ Ù…Ù‚Ø¯Ø§Ø± Ø§Ù„Ù…Ù†ØªØ¬Ø§Øª Ø§Ù„ØªÙŠ ØªØ±ØºØ¨ Ø§Ù„Ø´Ø±ÙƒØ§Øª ÙÙŠ Ø¥Ù†ØªØ§Ø¬Ù‡Ø§ ÙˆØ¨ÙŠØ¹Ù‡Ø§ Ø®Ø§Ù„Ù„ ÙØªØ±Ø© Ù…Ø¹ÙŠÙ†Ø©ØŸâ€¬
â€¢ The price of the product
â€¢ Everything else!
:â€«ÙŠØºÙŠØ± Ø§Ù„Ù…Ø¨Ù„Øº Ø§Ù„Ø°ÙŠ ØªØ±ØºØ¨ Ø§Ù„Ø´Ø±ÙƒØ§Øª ÙÙŠ Ø¨ÙŠØ¹Ù‡ØŸ Ù†Ù‚Ø³Ù… Ù‡Ø°Ø§ Ø¥Ù„Ù‰ ÙØ¦ØªÙŠÙ†â€¬
â€«Ø³Ø¹Ø± Ø§Ù„Ù…Ù†ØªØ¬â€¬
! â€«ÙƒÙ„ Ø´ÙŠØ¡ Ø¢Ø®Ø±â€¬
Figure 3.3 The Individual Supply
Curve (1 of 4)
The table shows how many pizzas a
firm will sell at a selection of prices.
This is a supply schedule.
Supply schedule: A table that shows
the relationship between the price of a
product and the quantity supplied,
ceteris paribus.
â€« Ø¬Ø¯ÙˆÙ„ ÙŠÙˆØ¶Ø­ Ø§Ù„Ø¹Ø§Ù„Ù‚Ø©â€¬:â€«Ù‡Ø°Ø§ Ø¬Ø¯ÙˆÙ„ ØªÙˆØ±ÙŠØ¯ Ø¬Ø¯ÙˆÙ„ Ø§Ù„ØªÙˆØ±ÙŠØ¯â€¬
Figure 3.3 The Individual Supply
Curve (2 of 4)
We plot each of the price-quantity
pairs on the graph; joining those points
gives the individual supply curve for
pizza.
Individual demand curve: A curve
that shows the relationship between
the price of a good and quantity
supplied by an individual firm, ceteris
paribus.
â€«Ù†Ù‚ÙˆÙ… Ø¨Ø±Ø³Ù… ÙƒÙ„ Ù…Ù† Ø£Ø²ÙˆØ§Ø¬ Ø§Ù„Ø³Ø¹Ø± Ø§Ù„ÙƒÙ…ÙŠØ© Ø¹Ù„Ù‰ Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠØ›â€¬
â€«Ø§Ø§Ù„Ù†Ø¶Ù…Ø§Ù… Ø¥Ù„Ù‰ ØªÙ„Ùƒ Ø§Ù„Ù†Ù‚Ø§Ø· ÙŠØ¹Ø·ÙŠ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ Ø§Ù„ÙØ±Ø¯ÙŠØ©â€¬
.â€«Ù„Ù„Ø¨ÙŠØªØ²Ø§â€¬
Figure 3.3 The Individual Supply
Curve (3 of 4)
The supply curve slopes upward; this is so
typical, we call it the law of supply.
Law of supply: There is a positive
relationship between price and quantity
supplied, ceteris paribus.
There are some prices below which the
firm would not provide any pizzas; for this
firm, the minimum supply price appears
to be \$2.
Minimum supply price: The lowest price
at which a product will be supplied.
ØŒâ€«Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ Ø§Ù„Ù…Ù†Ø­Ø¯Ø±Ø§Øª Ø§Ù„ØªØµØ§Ø¹Ø¯ÙŠØ©; Ù‡Ø°Ø§ Ù‡Ùˆ Ù†Ù…ÙˆØ°Ø¬ÙŠ Ø¬Ø¯Ø§â€¬
.â€«ÙˆÙ†Ø­Ù† Ù†Ø³Ù…ÙŠÙ‡Ø§ Ù‚Ø§Ù†ÙˆÙ† Ø§Ù„ØªÙˆØ±ÙŠØ¯â€¬
ceteris paribus.
â€« Ø§Ù„Ø­Ø¯â€¬.â€« Ø¯ÙˆØ§Ù„Ø±â€¬2 â€« ÙŠØ¨Ø¯Ùˆ Ø£Ù† Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø³Ø¹Ø± Ø§Ù„Ø¹Ø±Ø¶ Ù‡Ùˆâ€¬ØŒ â€«Ø§Ù„Ø´Ø±ÙƒØ©â€¬
.â€« Ù‡Ùˆ Ø£Ø¯Ù†Ù‰ Ø³Ø¹Ø± ÙŠØªÙ… ØªÙˆÙÙŠØ± Ø§Ù„Ù…Ù†ØªØ¬ Ø¨Ù‡â€¬:â€«Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù„Ø³Ø¹Ø± Ø§Ù„Ø¹Ø±Ø¶â€¬
Figure 3.3 The Individual Supply
Curve (4 of 4)
As price rises from \$8 to \$10, the firm
is willing to provide 100 more pizzas.
This is a change in quantity
supplied.
Change in quantity supplied: A
change in the quantity firms are willing
and able to sell when the price
changes; represented graphically by
movement along the supply curve.
â€« ÙØ¥Ù†â€¬ØŒ â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øªâ€¬10 â€« Ø¯ÙˆØ§Ù„Ø±Ø§Øª Ø¥Ù„Ù‰â€¬8 â€«Ù…Ø¹ Ø§Ø±ØªÙØ§Ø¹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± Ù…Ù†â€¬
.â€«Ø®Ø§Ù„Ù„ Ø§Ù„Ø­Ø±ÙƒØ© Ø¹Ù„Ù‰ Ø·ÙˆÙ„ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶â€¬
Why Is the Individual Supply Curve Positively
Sloped?
A higher price encourages the firm to increase its output by purchasing more
materials and hiring more workers.
Even if the new materials are more expensive, or the new workers are more
costly or less productive, the firm is willing to incur those higher marginal
costs to sell at higher prices.
â€¢ This is consistent with the marginal principle: increase the level of an
activity as long as its marginal benefit exceeds its marginal cost. Choose
the level at which the marginal benefit equals the marginal cost.
.â€«Ø§Ø±ØªÙØ§Ø¹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± ÙŠØ´Ø¬Ø¹ Ø§Ù„Ø´Ø±ÙƒØ© Ø¹Ù„Ù‰ Ø²ÙŠØ§Ø¯Ø© Ø¥Ù†ØªØ§Ø¬Ù‡Ø§ Ù…Ù† Ø®Ø§Ù„Ù„ Ø´Ø±Ø§Ø¡ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù…ÙˆØ§Ø¯ ÙˆØªÙˆØ¸ÙŠÙ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ø¹Ù…Ø§Ù„â€¬
.â€«Ù„ØªØ­Ù…Ù„ ØªÙ„Ùƒ Ø§Ù„ØªÙƒØ§Ù„ÙŠÙ Ø§Ù„Ù‡Ø§Ù…Ø´ÙŠØ© Ø§Ø£Ù„Ø¹Ù„Ù‰ Ù„Ù„Ø¨ÙŠØ¹ Ø¨Ø£Ø³Ø¹Ø§Ø± Ø£Ø¹Ù„Ù‰â€¬
â€« Ø§Ø®ØªØ± Ø§Ù„Ù…Ø³ØªÙˆÙ‰â€¬.â€« Ø²ÙŠØ§Ø¯Ø© Ù…Ø³ØªÙˆÙ‰ Ø§Ù„Ù†Ø´Ø§Ø· Ù…Ø§ Ø¯Ø§Ù…Øª ÙØ§Ø¦Ø¯ØªÙ‡ Ø§Ù„Ù‡Ø§Ù…Ø´ÙŠØ© ØªØªØ¬Ø§ÙˆØ² ØªÙƒÙ„ÙØªÙ‡ Ø§Ù„Ù‡Ø§Ù…Ø´ÙŠØ©â€¬:â€«ÙˆÙ‡Ø°Ø§ ÙŠØªØ³Ù‚ Ù…Ø¹ Ø§Ù„Ù…Ø¨Ø¯Ø£ Ø§Ù„Ø­Ø¯ÙŠâ€¬
The price is the marginal benefit; the supply curve shows the firmâ€™s
marginal cost of production.
Figure 3.4 From Individual to Market
Supply
Adding quantity supplied by each firm at each price gives
us the market supply curve.
Market supply curve: A curve showing the relationship
between price and quantity supplied by all firms, ceteris
paribus.
.â€«Ø³Ø¹Ø± ÙŠØ¹Ø·ÙŠÙ†Ø§ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ ÙÙŠ Ø§Ù„Ø³ÙˆÙ‚â€¬
â€« Ù…Ù†Ø­Ù†Ù‰ ÙŠØ¨ÙŠÙ†â€¬:â€«Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ ÙÙŠ Ø§Ù„Ø³ÙˆÙ‚â€¬
ceteris paribus. ØŒâ€«Ø§Ù„Ø´Ø±ÙƒØ§Øªâ€¬
Figure 3.5 The Market Supply Curve
with Many Firms
A perfectly competitive market
has hundreds of firms rather
than just two.
In the case of many firms, the
market supply curve will be
smooth rather than kinked.
In this graph, we assume there
are 100 firms identical to Lolaâ€™s.
â€«Ø§Ù„Ø³ÙˆÙ‚ Ø§Ù„ØªÙ†Ø§ÙØ³ÙŠØ© ØªÙ…Ø§Ù…Ø§ Ù„Ø¯ÙŠÙ‡Ø§ Ø§Ù„Ù…Ø¦Ø§Øª Ù…Ù† Ø§Ù„Ø´Ø±ÙƒØ§Øªâ€¬
.â€«Ø¨Ø¯Ø§Ù„ Ù…Ù† Ø§Ø«Ù†ÙŠÙ† ÙÙ‚Ø·â€¬
â€« Ø³ÙŠÙƒÙˆÙ† Ù…Ù†Ø­Ù†Ù‰â€¬ØŒâ€«ÙˆÙÙŠ Ø­Ø§Ù„Ø© Ø§Ù„Ø¹Ø¯ÙŠØ¯ Ù…Ù† Ø§Ù„Ø´Ø±ÙƒØ§Øªâ€¬
.Ù‹ â€«Ø§Ù„Ø¹Ø±Ø¶ Ø§Ù„Ø³ÙˆÙ‚ÙŠ Ø³Ù„Ø³Ø§ Ù‹ Ø¨Ø¯Ø§Ù„Ù‹ Ù…Ù† Ø£Ù† ÙŠÙƒÙˆÙ† Ù…Øª ÙŽÙŽÙˆ ÙŽØ±Ø³Ø§â€¬
100 â€« Ù†ÙØªØ±Ø¶ Ø£Ù† Ù‡Ù†Ø§Ùƒâ€¬ØŒâ€«ÙÙŠ Ù‡Ø°Ø§ Ø§Ù„Ø±Ø³Ù… Ø§Ù„Ø¨ÙŠØ§Ù†ÙŠâ€¬
Why Is the Market Supply Curve
Positively Sloped?
There are two reasons why the market supply curve is positively sloped.
As the market price increases,
1. Individual firms increase output by purchasing more materials and
hiring more workers; and
2. New firms enter the market, encouraged by the higher price.
ØŒâ€« Ù…Ø¹ Ø§Ø±ØªÙØ§Ø¹ Ø³Ø¹Ø± Ø§Ù„Ø³ÙˆÙ‚â€¬.â€«Ù‡Ù†Ø§Ùƒ Ø³Ø¨Ø¨Ø§Ù† Ù„Ù…Ø§Ø°Ø§ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ ÙÙŠ Ø§Ù„Ø³ÙˆÙ‚ Ù‡Ùˆ Ù…Ù†Ø­Ø¯Ø± Ø¨Ø´ÙƒÙ„ Ø¥ÙŠØ¬Ø§Ø¨ÙŠâ€¬
â€«ÙÙØ±Ø§Ø¯Ù‰ Ø§Ù„Ø´Ø±ÙƒØ§Øª ØªØ²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù†Ø§ØªØ¬ Ø¨Ø´Ø±Ø§Ø¡ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù…ÙˆØ§Ø¯ ÙˆØªÙˆØ¸ÙŠÙ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ø¹Ù…Ø§Ù„Ø›â€¬
.â€« Ø¨ØªØ´Ø¬ÙŠØ¹ Ù…Ù† Ø§Ø±ØªÙØ§Ø¹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø±â€¬ØŒâ€«ÙˆØ§Ù„Ø´Ø±ÙƒØ§Øª Ø§Ù„Ø¬Ø¯ÙŠØ¯Ù‡ ØªØ¯Ø®Ù„ Ø´Ø±ÙƒØ§Øª Ø¬Ø¯ÙŠØ¯Ø© Ø¥Ù„Ù‰ Ø§Ù„Ø³ÙˆÙ‚â€¬
As with the individual supply curve, the market supply curve
shows the marginal cost of production, this time for the
market as a whole.
â€« ÙØ¥Ù† Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø¹Ø±Ø¶ ÙÙŠ Ø§Ù„Ø³ÙˆÙ‚ ÙŠØ¨ÙŠÙ† Ø§Ù„ØªÙƒÙ„ÙØ©â€¬ØŒâ€«ÙˆÙƒÙ…Ø§ Ù‡Ùˆ Ø§Ù„Ø­Ø§Ù„ Ø¨Ø§Ù„Ù†Ø³Ø¨Ø© Ù„Ù…Ù†Ø­Ù‰ Ø§Ù„Ø¹Ø±Ø¶ Ø§Ù„ÙØ±Ø¯ÙŠâ€¬
Application 2: Sheep, Wool, and the
Law of Supply
In the 1990s, the world price
30%. The law of supply
suggests wool output would
decrease.
It did; wool-exporting
countries like New Zealand
converted land to more
profitable uses, like dairy
farming, forestry, and wine
production.
â€« Ø§Ù†Ø®ÙØ¶ Ø§Ù„Ø³Ø¹Ø± Ø§Ù„Ø¹Ø§Ù„Ù…ÙŠ Ù„Ù„ØµÙˆÙ Ø¨Ù†Ø­Ùˆâ€¬ØŒâ€«ÙÙŠ Ø§Ù„ØªØ³Ø¹ÙŠÙ†Ø§Øªâ€¬
â€« ÙˆÙŠØ´ÙŠØ± Ù‚Ø§Ù†ÙˆÙ† Ø§Ù„ØªÙˆØ±ÙŠØ¯ Ø¥Ù„Ù‰ Ø£Ù† Ø¥Ù†ØªØ§Ø¬ Ø§Ù„ØµÙˆÙâ€¬.Ùª30
.â€«Ø³ÙŠÙ†Ø®ÙØ¶â€¬
â€« ÙˆÙ„ÙƒÙ† ÙÙ‚Ø¯ Ø­ÙˆÙ„Øª Ø§Ù„Ø¨Ù„Ø¯Ø§Ù† Ø§Ù„Ù…ØµØ¯Ø±Ø© Ù„Ù„ØµÙˆÙâ€¬ØŒ â€«ÙØ¹Ù„Øª Ø°Ù„Ùƒâ€¬
ØŒâ€«Ù…Ø«Ù„ Ù†ÙŠÙˆØ²ÙŠÙ„Ù†Ø¯Ø§ Ø§Ø£Ù„Ø±Ø§Ø¶ÙŠ Ø¥Ù„Ù‰ Ø§Ø³ØªØ®Ø¯Ø§Ù…Ø§Øª Ø£ÙƒØ«Ø± Ø±Ø¨Ø­ÙŠØ©â€¬
3.3 Market Equilibrium: Bringing
Demand and Supply Together
Explain the role of price in reaching a market
equilibrium.
A market is an arrangement that brings buyers and sellers together.
Market equilibrium: A situation in which the quantity demanded equals
the quantity supplied at the prevailing market price.
When a market is in equilibrium, there is no pressure on the price to
change.
.â€« Ù‡Ø¤Ø§Ù„Ø¡ Ø§Ù„Ù…Ø´ØªØ±ÙŠÙ† ÙˆØ§Ù„Ø¨Ø§Ø¦Ø¹ÙŠÙ† ÙŠØ­Ø¯Ø¯ÙˆÙ† Ù…Ø¹Ø§ Ù‹ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± ÙˆØ§Ù„ÙƒÙ…ÙŠØ§Øª Ø§Ù„Ù…ØªØ¯Ø§ÙˆÙ„Ø©â€¬.â€«Ø§Ù„Ø³ÙˆÙ‚ Ù‡Ùˆ Ø§Ù„ØªØ±ØªÙŠØ¨ Ø§Ù„Ø°ÙŠ ÙŠØ¬Ù…Ø¹ Ø¨ÙŠÙ† Ø§Ù„Ù…Ø´ØªØ±ÙŠÙ† ÙˆØ§Ù„Ø¨Ø§Ø¦Ø¹ÙŠÙ†â€¬
.â€« Ø§Ù„ ÙŠÙƒÙˆÙ† Ù‡Ù†Ø§Ùƒ Ø¶ØºØ· Ø¹Ù„Ù‰ Ø§Ù„Ø³Ø¹Ø± Ù„Ù„ØªØºÙŠÙŠØ±â€¬ØŒâ€«Ø¹Ù†Ø¯Ù…Ø§ ÙŠÙƒÙˆÙ† Ø§Ù„Ø³ÙˆÙ‚ ÙÙŠ Ø­Ø§Ù„Ø© ØªÙˆØ§Ø²Ù†â€¬
Figure 3.6 Market Equilibrium (1 of 3)
At the market equilibrium (point a,
with price = \$8 and quantity =
30,000), the quantity supplied
equals the quantity demanded.
Everyone willing to pay \$8
receives a pizza for that price; and
every pizza firms are willing to
produce at \$8 gets sold.
â€« Ø¯ÙˆØ§Ù„Ø±â€¬8 = â€« Ù…Ø¹ Ø§Ù„Ø³Ø¹Ø±â€¬ØŒâ€«ÙÙŠ ØªÙˆØ§Ø²Ù† Ø§Ù„Ø³ÙˆÙ‚ (Ø§Ù„Ù†Ù‚Ø·Ø© Ø£â€¬
â€« Ø¯ÙˆØ§Ù„Ø± ÙŠØªÙ„Ù‚Ù‰ Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ù„Ù‡Ø°Ø§â€¬8 â€«Ø§Ù„Ø¬Ù…ÙŠØ¹ Ø¹Ù„Ù‰ Ø§Ø³ØªØ¹Ø¯Ø§Ø¯ Ù„Ø¯ÙØ¹â€¬
8 â€«Ø§Ù„Ø³Ø¹Ø±Ø› ÙˆÙƒÙ„ Ø´Ø±ÙƒØ§Øª Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø¹Ù„Ù‰ Ø§Ø³ØªØ¹Ø¯Ø§Ø¯ Ø¥Ù„Ù†ØªØ§Ø¬ ÙÙŠâ€¬
.â€« ÙŠØ­ØµÙ„ Ø¨ÙŠØ¹Ù‡Ø§â€¬\$
Figure 3.6 Market Equilibrium (2 of 3)
At a price below the equilibrium price
(\$6), there is excess demandâ€”the
quantity demanded at point c exceeds
the quantity supplied at point b.
Excess demand: A situation in which,
at the prevailing price, the quantity
demanded exceeds the quantity
supplied.
This mismatch causes the price of
pizza to rise; firms will realize they can
raise the price and still sell all the
pizzas they planned to sell.
– â€« Ù‡Ù†Ø§Ùƒ Ø§Ù„Ø·Ù„Ø¨ Ø§Ù„Ø²Ø§Ø¦Ø¯â€¬ØŒ)â€« Ø¯ÙˆØ§Ù„Ø±â€¬6( â€«ÙÙŠ Ø³Ø¹Ø± Ø£Ù‚Ù„ Ù…Ù† Ø³Ø¹Ø± Ø§Ù„ØªÙˆØ§Ø²Ù†â€¬
B
â€«Ù‡Ø°Ø§ Ø¹Ø¯Ù… Ø§Ù„ØªØ·Ø§Ø¨Ù‚ ÙŠØ¤Ø¯ÙŠ Ø¥Ù„Ù‰ Ø§Ø±ØªÙØ§Ø¹ Ø³Ø¹Ø± Ø§Ù„Ø¨ÙŠØªØ²Ø§; ÙˆØ³ÙˆÙ ØªØ¯Ø±Ùƒâ€¬
â€«Ø§Ù„Ø´Ø±ÙƒØ§Øª Ø£Ù†Ù‡Ø§ ÙŠÙ…ÙƒÙ† Ø£Ù† ØªØ±ÙØ¹ Ø§Ù„Ø³Ø¹Ø± ÙˆØ¨ÙŠØ¹ Ø¬Ù…ÙŠØ¹ Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø§Ù„ ØªØ²Ø§Ù„â€¬
.â€«ØªØ®Ø·Ø· Ù„Ø¨ÙŠØ¹â€¬
Figure 3.6 Market Equilibrium (3 of 3)
At a price above the equilibrium price
(\$12), there is excess supplyâ€”the quantity
supplied at point e exceeds the quantity
demanded at point d.
Excess supply: A situation in which the
quantity supplied exceeds the quantity
demanded at the prevailing price.
This mismatch causes the price of pizza to
fall; firms will realize they cannot sell all of
their pizzas at the prevailing price, and will
start undercutting one another.
â€« Ù‡Ù†Ø§Ùƒ ÙØ§Ø¦Ø¶ Ø§Ù„Ø¹Ø±Ø¶â€¬ØŒ)â€« Ø¯ÙˆØ§Ù„Ø±Ø§â€¬12( â€«ÙÙŠ Ø³Ø¹Ø± Ø£Ø¹Ù„Ù‰ Ù…Ù† Ø³Ø¹Ø± Ø§Ù„ØªÙˆØ§Ø²Ù†â€¬
.â€«Ø¨Ø§Ù„Ø³Ø¹Ø± Ø§Ù„Ø³Ø§Ø¦Ø¯â€¬
â€«ÙŠØ¤Ø¯ÙŠ Ù‡Ø°Ø§ Ø¹Ø¯Ù… Ø§Ù„ØªØ·Ø§Ø¨Ù‚ Ø¥Ù„Ù‰ Ø§Ù†Ø®ÙØ§Ø¶ Ø³Ø¹Ø± Ø§Ù„Ø¨ÙŠØªØ²Ø§Ø› ÙˆØ³ÙˆÙ ØªØ¯Ø±Ùƒâ€¬
â€«Ø§Ù„Ø´Ø±ÙƒØ§Øª Ø£Ù†Ù‡Ø§ Ø§Ù„ ØªØ³ØªØ·ÙŠØ¹ Ø¨ÙŠØ¹ Ø¬Ù…ÙŠØ¹ Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø§Ù„Ø®Ø§ØµØ© Ø¨Ù‡Ù… ÙÙŠ Ø§Ù„Ø³Ø¹Ø±â€¬
.â€« ÙˆØ³ÙˆÙ ØªØ¨Ø¯Ø£ ÙÙŠ ØªÙ‚ÙˆÙŠØ¶ Ø¨Ø¹Ø¶Ù‡Ø§ Ø§Ù„Ø¨Ø¹Ø¶â€¬ØŒâ€«Ø§Ù„Ø³Ø§Ø¦Ø¯â€¬
Application 3: Shrinking Wine Lakes
The European Union guarantees
minimum prices for agricultural products
like grapes. These above-equilibrium
prices encourage overproduction, which
the E U guarantees to buy.
Recent reforms have reduced (and in
some cases eliminated) these price
guarantees, resulting in shrinking excess
â€œwine lakesâ€ and â€œbutter mountains.â€
â€«ÙŠØ¶Ù…Ù† Ø§Ø§Ù„ØªØ­Ø§Ø¯ Ø§Ø£Ù„ÙˆØ±ÙˆØ¨ÙŠ Ø§Ù„Ø­Ø¯ Ø§Ø£Ù„Ø¯Ù†Ù‰ Ù…Ù† Ø§Ø£Ù„Ø³Ø¹Ø§Ø± Ù„Ù„Ù…Ù†ØªØ¬Ø§Øªâ€¬
â€« Ù‡Ø°Ù‡ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± ÙÙˆÙ‚ Ø§Ù„ØªÙˆØ§Ø²Ù† ØªØ´Ø¬Ø¹ Ø§Ø¥Ù„ÙØ±Ø§Ø· ÙÙŠâ€¬.â€«Ø§Ù„Ø²Ø±Ø§Ø¹ÙŠØ© Ù…Ø«Ù„ Ø§Ù„Ø¹Ù†Ø¨â€¬
.â€«Ù„Ù„Ø´Ø±Ø§Ø¡â€¬U E â€« ÙˆØ§Ù„ØªÙŠ ÙŠØ¶Ù…Ù†â€¬ØŒâ€«Ø§Ø¥Ù„Ù†ØªØ§Ø¬â€¬
â€«ÙˆÙ‚Ø¯ Ø£Ø¯Øª Ø§Ø¥Ù„ØµØ§Ù„Ø­Ø§Øª Ø§Ø£Ù„Ø®ÙŠØ±Ø© Ø¥Ù„Ù‰ Ø®ÙØ¶ (ÙˆÙÙŠ Ø¨Ø¹Ø¶ Ø§Ù„Ø­Ø§Ø§Ù„Øªâ€¬
â€« Ù…Ù…Ø§ Ø£Ø¯Ù‰ Ø¥Ù„Ù‰ ØªÙ‚Ù„Øµ ÙØ§Ø¦Ø¶â€¬ØŒâ€«Ø§Ù„Ù‚Ø¶Ø§Ø¡ Ø¹Ù„Ù‰) Ù‡Ø°Ù‡ Ø§Ù„Ø¶Ù…Ø§Ù†Ø§Øª Ù„Ø£Ù„Ø³Ø¹Ø§Ø±â€¬
3.4 Market Effects of Changes in
Demand
Describe the effect of a change in demand on the
equilibrium price.
Market equilibrium occurs when the quantity supplied equals
the quantity demanded.
Changes in the demand side of the market can affect the
equilibrium price and the equilibrium quantity.
.â€«ÙˆØµÙ ØªØ£Ø«ÙŠØ± Ø§Ù„ØªØºÙŠØ± ÙÙŠ Ø§Ù„Ø·Ù„Ø¨ Ø¹Ù„Ù‰ Ø³Ø¹Ø± Ø§Ù„ØªÙˆØ§Ø²Ù†â€¬
.â€«ÙÙŠ Ø§Ù„Ø³ÙˆÙ‚ Ø¹Ù„Ù‰ Ø³Ø¹Ø± Ø§Ù„ØªÙˆØ§Ø²Ù† ÙˆÙƒÙ…ÙŠØ© Ø§Ù„ØªÙˆØ§Ø²Ù†â€¬
Figure 3.7 Change in Quantity Demanded
Versus Change in Demand (1 of 2)
â€«ØªØºÙŠØ±Ø§ ÙÙŠ Ø§Ù„Ø³Ø¹Ø±â€¬
â€«ÙŠØ³Ø¨Ø¨â€¬
Ù‹
.â€«Ø­Ø±ÙƒØ© Ø¹Ù„Ù‰ Ø·ÙˆÙ„ Ù…Ù†Ø­Ù†Ù‰ Ø·Ù„Ø¨ ÙˆØ§Ø­Ø¯â€¬
â€«Ø§Ù†Ø®ÙØ§Ø¶ ÙÙŠ Ø§Ø£Ù„Ø³Ø¹Ø§Ø± ÙŠØ³Ø¨Ø¨ Ø§Ø§Ù„Ù†ØªÙ‚Ø§Ù„â€¬
Panel (A) shows a change in price causing a change in quantity demanded, a
movement along a single demand curve.
A decrease in price causes a move from point a to point b, increasing the
quantity demanded.
Figure 3.7 Change in Quantity Demanded
Versus Change in Demand (2 of 2)
â€«ØªØºÙŠØ±Ø§ Ù‹ ÙÙŠâ€¬B) ( â€«(Ø¨) ÙŠØ¸Ù‡Ø± Ø§Ù„ÙØ±ÙŠÙ‚â€¬
â€«Ø§Ù„Ø·Ù„Ø¨ Ù†Ø§Ø¬Ù…Ø§ Ù‹ Ø¹Ù† ØªØºÙŠÙŠØ±Ø§Øª ÙÙŠ Ù…ØªØºÙŠØ±â€¬
â€« ÙˆÙ‡Ø°Ø§ ÙŠØ­ÙˆÙ„ Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø·Ù„Ø¨â€¬.â€«ØºÙŠØ± Ø§Ù„Ø³Ø¹Ø±â€¬
.â€«Ø¨Ø£ÙƒÙ…Ù„Ù‡â€¬
â€« Ø¥Ù† Ø²ÙŠØ§Ø¯Ø© Ø§Ù„Ø·Ù„Ø¨ ØªØ­ÙˆÙ„ Ù…Ù†Ø­Ù†Ù‰â€¬-10
.2-â€« Ø¥Ù„Ù‰ Ø¯Ø§Ù„â€¬1 â€«Ø§Ù„Ø·Ù„Ø¨ Ù…Ù† Ù…Ø¯â€¬
â€« Ù‡Ùˆ ØªØ­ÙˆÙ„ ÙÙŠ Ù…Ù†Ø­Ù†Ù‰â€¬:â€«ØªØºÙŠÙŠØ± Ø§Ù„Ø·Ù„Ø¨â€¬
â€«Ø§Ù„Ø·Ù„Ø¨ Ø§Ù„Ù†Ø§ØªØ¬ Ø¹Ù† ØªØºÙŠÙŠØ± ÙÙŠ Ù…ØªØºÙŠØ± Ø¢Ø®Ø±â€¬
.â€«ØºÙŠØ± Ø³Ø¹Ø± Ø§Ù„Ù…Ù†ØªØ¬â€¬
Panel (B) shows a change in demand caused by changes in a variable
other than the price. This shifts the entire demand curve.
An increase in demand shifts the demand curve from D1 to D2.
Change in demand: A shift of the demand curve caused by a change in
a variable other than the price of the product.
Increases in Demand Shift the Demand
Curve (1 of 3)
What could cause the demand curve to increase (shift to the right)?
Anything other than a price decrease that makes consumers want to buy
more of the good. Some examples:
â€¢ An income change: Consumers buy more vacations and new cars when
their income increases. We call these normal goods. But consumers buy
less of some goods (like second-hand clothing, or ramen noodle
packets) when their income increases: these are inferior goods.
â€«Ù…Ø§ Ø§Ù„Ø°ÙŠ ÙŠÙ…ÙƒÙ† Ø£Ù† ÙŠØªØ³Ø¨Ø¨ ÙÙŠ Ø²ÙŠØ§Ø¯Ø© Ù…Ù†Ø­Ù†Ù‰ Ø§Ù„Ø·Ù„Ø¨ (Ø§Ù„ØªØ­ÙˆÙ„ Ø¥Ù„Ù‰ Ø§Ù„ÙŠÙ…ÙŠÙ†)ØŸ Ø£ÙŠ Ø´ÙŠØ¡ Ø¢Ø®Ø± ØºÙŠØ± Ø§Ù†Ø®ÙØ§Ø¶ Ø§Ø£Ù„Ø³Ø¹Ø§Ø±â€¬
:â€« Ø¨Ø¹Ø¶ Ø§Ø£Ù„Ù…Ø«Ù„Ø©â€¬.â€«Ø§Ù„ØªÙŠ ØªØ¬Ø¹Ù„ Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙŠÙ† ÙŠØ±ØºØ¨ÙˆÙ† ÙÙŠ Ø´Ø±Ø§Ø¡ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ø®ÙŠØ±â€¬
â€« Ù†Ø­Ù† Ù†Ø¯Ø¹Ùˆâ€¬.â€« ÙŠØ´ØªØ±ÙŠ Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙˆÙ† Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ø¹Ø·Ø§Ù„Øª ÙˆØ§Ù„Ø³ÙŠØ§Ø±Ø§Øª Ø§Ù„Ø¬Ø¯ÙŠØ¯Ø© Ø¹Ù†Ø¯Ù…Ø§ ÙŠØ²Ø¯Ø§Ø¯ Ø¯Ø®Ù„Ù‡Ù…â€¬:â€«ØªØºÙŠÙŠØ± Ø§Ù„Ø¯Ø®Ù„â€¬
â€« Ø£Ùˆ Ø­Ø²Ù…â€¬ØŒâ€« ÙˆÙ„ÙƒÙ† Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙŠÙ† ÙŠØ´ØªØ±ÙˆÙ† Ø£Ù‚Ù„ Ù…Ù† Ø¨Ø¹Ø¶ Ø§Ù„Ø³Ù„Ø¹ (Ù…Ø«Ù„ Ø§Ù„Ù…Ø§Ù„Ø¨Ø³ Ø§Ù„Ù…Ø³ØªØ¹Ù…Ù„Ø©â€¬.â€«Ù‡Ø°Ù‡ Ø§Ù„Ø³Ù„Ø¹ Ø§Ù„Ø¹Ø§Ø¯ÙŠØ©â€¬
Normal good: A good for which an increase
in income increases demand.
Inferior good: A good for which an increase in
income decreases demand.
.â€«Ø¹Ù„Ù‰ Ø§Ù„Ø¯Ø®Ù„â€¬
.â€«Ø§Ù„Ø·Ù„Ø¨â€¬
Increases in Demand Shift the Demand
Curve (2 of 3)
More examples:
â€¢ Increase in the price of a substitute good: Tacos and pizza are substitutes:
when the price of tacos rise, some consumers switch to buying pizzas instead.
â€¢ Decrease in the price of a complementary good: Pay-per-view sports events
and pizza are complements: when the price of a pay-per-view event falls, more
consumers watch it, and buy more pizza to consume with it.
.â€«Ø§Ù„ØªØ­ÙˆÙ„ Ø¥Ù„Ù‰ Ø´Ø±Ø§Ø¡ Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø¨Ø¯Ø§Ù„ Ù…Ù† Ø°Ù„Ùƒâ€¬
.â€« ÙˆÙŠØ´ØªØ±ÙˆÙ† Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ù„Ø§Ù„Ø³ØªÙ‡Ø§Ù„Ùƒ Ù…Ø¹Ù‡Ø§â€¬ØŒâ€« ÙŠØ´Ø§Ù‡Ø¯Ù‡ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙŠÙ†â€¬ØŒâ€«Ø­Ø¯Ø« Ø§Ù„Ø¯ÙØ¹ Ù„ÙƒÙ„ Ø¹Ø±Ø¶â€¬
Substitutes: Two goods for which an increase in the price of one good
increases the demand for the other good.
Complements: Two goods for which a decrease in the price of one good
increases the demand for the other good.
.â€« Ø³Ù„Ø¹ØªÙŠÙ† Ø§Ù„ØªÙŠ Ø§Ù†Ø®ÙØ§Ø¶ ÙÙŠ Ø³Ø¹Ø± Ø³Ù„Ø¹Ø© ÙˆØ§Ø­Ø¯Ø© ÙŠØ²ÙŠØ¯ Ø§Ù„Ø·Ù„Ø¨ Ø¹Ù„Ù‰ Ø§Ù„Ø³Ù„Ø¹ Ø§Ø£Ù„Ø®Ø±Ù‰â€¬:â€«ÙŠÙƒÙ…Ù„â€¬
Increases in Demand Shift the Demand
Curve (3 of 3)
Even more examples:
â€¢ Increase in population: More people means more potential pizza
consumers.
â€¢ Shift in consumer preferences: Consumers might decide the like
for pizza more than they used to. A successful pizza advertising
campaign might increase the demand for pizza.
â€¢ Expectations of higher future prices: If consumers learn pizza
prices will rise next week, they might buy more pizzas this week, and
fewer next week.
.â€« Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù†Ø§Ø³ ÙŠØ¹Ù†ÙŠ Ø§Ù„Ù…Ø²ÙŠØ¯ Ù…Ù† Ø§Ù„Ù…Ø³ØªÙ‡Ù„ÙƒÙŠÙ† Ø§Ù„Ø¨ÙŠØªØ²Ø§ Ø§Ù„Ù…Ø­ØªÙ…Ù„Ø©â€¬:â€«Ø²ÙŠØ§Ø¯Ø© Ø¹Ø¯Ø¯ Ø§Ù„Ø³ÙƒØ§Ù†â€¬
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Table 3.1 Increases in Demand Shift
the Demand Curve to the Right
Figure 3.8 An Increase in Demand
Increases the Equilibrium Price (1 of 2)
An increase in demand shifts the
demand curve to the right: At each
price, the quantity demanded
increases.
At the initial price (\$8), there is
excess demand, with the quantity
demanded (point b) exceeding the
quantity supplied (point a).
The excess demand causes the
price to rise, and equilibrium is
restored at point c.
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Figure 3.8 An Increase in Demand
Increases the Equilibrium Price (2 of 2)
The result of the increase
in demand: the equilibrium
price rises to \$10, and the
equilibrium quantity of
pizzas rises to 40,000
pizzas per month.
Generally, we predict an
increase in demand will
increase the equilibrium
price and increase the
equilibrium quantity.
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Table 3.2 Decreases in Demand Shift
the Demand Curve to the Left
Figure 3.9 A Decrease in Demand
Decreases the Equilibrium Price (1 of 2)
A decrease in demand shifts the
demand curve to the left: At each
price, the quantity demanded
decreases.
At the initial price (\$8), there is
excess supply, with the quantity
supplied (point a) exceeding the
quantity demanded (point b).
The excess supply causes the
price to drop, and equilibrium is
restored at point c.
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Figure 3.9 A Decrease in Demand
Decreases the Equilibrium Price (2 of 2)
The result of the decrease in
demand: the equilibrium price
falls to \$6, and the equilibrium
quantity of pizzas falls to
20,000 pizzas per month.
Generally, we predict an
decrease in demand will
decrease the equilibrium price
and decrease the equilibrium
quantity.
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Application 4: Craft Beer and the Price
of Hops
Between 2012 and 2017,
U.S. craft beer production
increased more than 30%.
Craft beer brewers
increased their demand for
ingredients, including hops.
As a result of the demand
increase, the equilibrium
price of hops rose
substantially: from \$3.17 to
\$5.92 per pound.
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3.5 Market Effects of Changes in Supply
Describe the effect of a change in supply on the
equilibrium price.
Market equilibrium occurs when the quantity supplied equals
the quantity demanded.
Changes in the supply side of the market can affect the
equilibrium price and the equilibrium quantity.
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Figure 3.10 Change in Quantity Supplied versus Change in Supply
(1 of 2)
Panel (A) shows a change in price causing a change in quantity
supplied, a movement along a single supply curve.
An increase in price causes a move from point a to point b, increasing the
quantity supplied.
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Figure 3.10 Change in Quantity Supplied versus Change in Supply (2 of 2)
Panel (B) shows a change in supply caused by changes in a variable other than
price. This shifts the entire supply curve.
An increase in supply shifts the entire supply curve from S1 to S2.
Change in supply: A shift of the supply curve caused by a change in a variable
other than the price of the product.
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Increases in Supply Shift the Supply Curve
What could cause the supply curve to increase (shift to the right)? Anything other than a price
increase that makes firms want to provide more of the good. Some examples:
â€¢ A decrease in input costs: If wages or the cost of materials go down, production
becomes more profitable, so firms expand.
â€¢ Technological advance: New technologies can make production more profitable and
hence encourage expansion.
â€¢ Government subsidy: A payment from the government will also make production more
profitable also.
â€¢ Expected future prices falling: A firm that learns prices will fall next month will try to sell
more at current higher prices.
â€¢ Number of producers: More firms mean more production.
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