Section
~U1CROEOON'O'MICS ee io T i m ! !;!; !
Dl[~CI~:io~:
: E " . . ( 1 . ( : L i '0
ttOIllS. S e e c
~h on
i::h~ q'I,L~8tl,{[Im$ {!I~ J.r!oJ..'Qmpl(~~ S~'~L'
,)iJ:S:l~lW ~lW ;~ 1ITJ~ll Id.$ ,)iJ:S:l
then fill
1 1 I ~B ks(. illl
professor t~ il
:rnjn~te5'
foHq.....
~i'l/$~~gg$$wd tm~~?ii,$J:;!l; o:r' COiU1iI)B~
b~
,eor,oosf-Io,ncLtlllg
O'Yt1J
on th
a ns ns we we r
dlee
a;id!)'3'i~ ap
tlte .o ' ~ . ' I ! p i l 1 i g , leegst t ,u ,u ~ '{'{ : n o t e s : O I 1 J o o m . pt pt lili :~ :~ e l:l: _ OlLtC th.e < M d e s ; B e n , un l o a : Q ; d S Lg L g . o , ~ , $~;Il!.J.~-!JU~p~;lIr!.r I.'!iijif Ilj,dmiut~~~. t~~pe 5 i ) J 1 'I,'I,'\'}nJ!~,
1Il0W8 pe
ne;ct'!.:!JW
line o t.t. he he l a id id e , i\.m.i.~calli l'OOU
:papif:~p o e t
~ype,f)1} ~.L'I!~J:i!"!!.I'be'll},r
p~s.
1,i1,l1,}i'@
mir~lLIte,
of
s ,t,t .w .w 1 e : 1 ilil '~ .
t:iif
per I 1 I J : L r , l u k _ "!AfhE "!AfhE ·h of th, :foUt[l\'ili:r~ $t~L
An
"£IS
~L
w,rrJPi1'~1~i~
ii:'( ii:'(:adi' :adi'rug r ug stlJ.ldent stlJ.ldent
,l,ld'l,\'~Lm~;.,£i~
[111
-- -- --
,papers!
~j)rnp'a·t:a:~i,.e ad 1,i'21:rIt:l'~
Ill! ~Vp[IlI:g.l,ec:.tlfl;re
to
J.I,'tl't(O'ii..
:B
A!ITIlI , h ~ $
Ml ~ t i J - s q h , I J ~ ; A ; ! d
in :ru~'I!d,-
illllE;'5ttrld'l1lir~tpapers,
and
OO~I[L're
~'I?lPi[.I,g
has lect lectur ur
lI
ir
note note
Be . ~ 1 . , c o m p . Z ! l ' a t t i v - e ad vantage t(:adir~g .t lIlil:l,e.l:~[,papers, hM: £I CQ':rD1ipU~£i.'t~v~ic 'l£l,lil~..ag~~In '~;vpi'l1Ig ].ect~l;r,~ rwtes. '0- I le le m 8 l J {:omjJ;(UMt'l,i~: ~1J."iI;:Itl1it8,g.e b o ea ng eu en p~1LS and, [.rplng' lee> t~~];,~.L{LI~~.
: E i a m , liu'!!:li~n
:Iliil1l:100h~it'J.:.tI!d;i,r~lF~~HB
1 ! 't't ,',' & ,1 ,1 ~ s tu tu de de n t
ture ture note notes. s.
P~ffi
210·,
in
both
and typh~~' Leer
th.e gt.i.'!i,ph ab6¥e!, lloilJlUy 'pr{rldlldmg pOiF~t d)
:2 A:coo~\d.[rug,to
p r od od u cJ cJ 1 llll g .
{10rCL'-~try
'CJLl["a
U p po p o rtr t I!I! U ;L ;L H ~ y C O $ t
; f!f! !!!! rIrI QW QW 6 I l 'CO[l~!J[Thel' good 15
20 -ca;p -ca;pit ita, a, rn~
C.
'it:h8J[l
gQOd8
C Z lpl p ~ X ~
POc!
tl1laT~ tl1laT~ 21]t,capi~).I. 21]t,capi~).I.
'CO[J;Sumeil goods '0- 20 'CO[J;Sumeil f\l£!'I,'!,'!!:!1"
~ha:r~20 ' C O I ' i i E i : L J J m e : r g o o d s
F'AG,E
Se tion tion :;
[ba l ~ r . r
·~niv.~.1i.:llty
i : :;:; w l ; , g ~ . ~ . I 1 I . e . ; r t r : i B , l i j~j~ jS jS ! i l i
S~lt i€ll i€ll!t !t
.i.[I(:I:\'l~LZ1i~~
increase 'It! is udio udiol[ l[ if 'tne prlee ei.3stid.ty
[~5, [~5,
OOVOO.ll!e8
v0f3rgi~.y
ual-
is.
'!,I\1.:'![stt~) cdl'tc&ti·(1rt1
inelestte unit 'e a""t~t:
'B
,~L€LS'L;~
th
~.lJl;ljjl
da
Pl:boo
Qti:,!!~.[' ~£
priC€ oem[~ below th
sold
qlll.ZUiUJ.ty
h$
'1. :Fi'irlD1'ij totai
or service a![!dl a![!dl :9 result, each a d d i t 1 , O J i l a B 1II1ili.t w i H t l 1 i G ; ~o ~p,<'I,~ less r o ~ ·e;:: e ;::bc bc addi additi tion onal al unit unit ~J'i ~J'i bc:ioa,'ip'i.o."[" .S {JO.Ig:1s.~r:;!:H~ with U i J ~ UtL~·Qf
.A._.
di.!t.ui!I'J.i$hl.I!I:3- l'eit 1 H S ·
It.
H '!i~rgil1ll'il d [ !I!I ' J. J. ~ i!i! l'l' .l.l .i.i : dl dl lili ~ ~H'!i~rgil1ll'il
eqnll eqnllib ibrln rln
price
fQHf.i"¥liing
e[[I!.lj.~
{lOS~ ship b5~we.e!!l the i'lIV0f3f8g€~~~ {lOS~ I1[La:t'gin~ eost ,cur''i,re ~[f.I.theS~OI!,~rn?
exceed 'the'
win
t·0'J-e!lU11.eS
in the, m~)td..;;et
win ~x:ce~;l U'II' m~rgi:I'.I;!)d I Pm P m d I !) !) d :n :n .~ .~ t h e l as as t sold,
I E : . Fd~
ur
k rw rw ln ln g w i
d ec ec re re as as e
(i(]8~.
{~
.the de:-l]1I~nd
~}Qrk, 1 . f : ' p o r k goods
i[iIf BH~l"'a;w.es,
fJi[',l!:!
i1tc~£::'~~
potatl!X!6
are
r : .l.l -C -C l;l; m p ~e ~e r lili 'J 'J l}l} 1 :I:I !f!f IU IU'y l
goorl!~ ~h;::: cost gf t n ' M . l s p g ~ : ! t , i : l 1 I g
dEm:r¢~t~
beef to
'C()!i1:WLl!I"[l{~.!rS
il1l(:~s(;;:
i.11I
t h 4 o ' l 1!I'.I,eOI1r.I!$ 1 J ; : ' i l G ~ : ; : of
C O I f J J 5 I l 1 m e u : : s , if ,~:::_Fl:!I!~oodi)
h-eahJa, (1
th
ic
'thillUI
:1 'Wlil·~ab81l':n p
L ' f'f ' ,h,h i c h o f . M:I~ f ' Q l n o ' L ' f : r u ~ g r\._
b\'lt~@:l'
dl.kb:m
:n
f:
:r.lll.rJ~~
lIDJod.
~alQ!;lP,i!l'.I£
:13,_
:;l!io-er..f,l~
~ o : r YPII;Lr
ne ea es
Qi;,:ll.mr'?
r f h i ? i th:l':n wil] de(}l:{~tise ~'~I-j ~ r ; l " e l {rIf p~,orhm-
b Q ~ j , e t l 'QOij~
prlc~
short
UIir!;!l go
~m-t Il;~r'!/~,
Ul~
[n~Ji'T'gilll;£iJ
C-Cl0rt
curve 1~i6i:mg,
]f th
eo
's
,rr.ui:i:rga'IIl~,
it e'lffl'l'.'¥' 1!1!Iv€~ f~!rI1I'.I.'6';
IQr:;!i~rl;:s
w~ll
IO l O : ;;;; ~ ~~x,rMl' IO
hU~IJ;:fat:!C't~
:i.ndl., :i.ndl.,ll; ll;:;i :;itr: tr:}" }" :i.
18 l'iiS~.ng,
th
~P.i'-
above
tht~ , r n ~ u W . n f i ~
b~ ,un~ ,un~u' u'gj gj:n :n
,urJ$J:~~n~L~
Il»';ii~ i ;.;. :J :J lJ lJ r
1 :':' ) ~l't
rnmirrl1lll'ffi
0 11 11 ', 1, 1, (Il;.lh:!tJJ:~~CJte!rI~~l.c
p ! ; : ! ' J : f I l o i t ! I ! ; , ' ~ y '(!O(l'.L~~;:;r:,II~~UVT.;!lJIi1i~I!J::~1;~
is that that l Iu Iu di di v -k -k lm lm d f irir m a
en~8~( en~8~( h~produc
dliIfe:r~liltiatlO"m
,e:w~e:r or
the l { r i r u ~
e : :d :d r t a n U!IJ.d.uc5tl'.'~ in
rULDI
poo~ti'\'~ hnghng- ,run ,run
·e<.1IJ.'Iu
eClr:1l1'lo1ll1rCS .
profits
iiJ:J: ~
't~e
:lI;~hIElr.~is!(!:~O m [ J l d ! r 1 3 ~ ~ O O '11l1flrk(i~t ~'hlu,T.;!l fSL0L9
:;:Ii
d,Q '!,l.i'I1I"'!,f;ijJ.'d-s.lop '!,l.i'I1I"'!,f;ijJ.'d-s.lop ll'1ig , [ j , t \ I 1 I ' J ; f ' l L l l d ,CiLl'rv~
tJJ~t-!<
dr¥-
crease. .~~_.MQ[\'! f u : r r m ; ; win e u ~ t ! l o 1 r th
(!.·I]I:~
r"
d.'~r~l~~ "V
ng
cu .. is ran:i~ug.
{lilJl~Pllt{lilJl~Pllt-
il;:I:$iga. a....
'the
iI,VB
ve
~l,V0fa~'etOt::l[, ~l,V0fa~'etOt::l[,
lI,Ve:L'~
SJ
nd J:'itl~
lI.\,e lI.\,erag rage: e: '~OIti '~OIti!J !J CijS~ CijS~ curve is
rUI[;
r,['h;;:; tirm
D_ rrh~ rrh~
d-l3cr·'(!;f!Is.r:'!I i:n
is
the m k l ' l '~'~ w 8 . i ;t')OO:~ '!..Uif.''i '!..Uif.''i,1'€i ,1'€ i55 eJ.'age wtaJ. 0!J$t curve.
tiOJrl. B_
;(II
C'1)J['!l45-
margirt irtl. l.aJ aJ eosr eosr c!lJ c!lJl'l''I 'Il! l!e, e,th th the marg
'~h~ _ J : r i : ( : . ¢
aJIld be€f 31.'€ 6l1Lbstitut,e
~ 3 i _ :",h1
~tIjIt~l,~t
@l'~e
equi~ibrillLm: p r i c e ,
~[.Ilcril::;II.::;.a i , [ u
-Cllli -CllliV€. V€.
re a ' V e r . a . g e '~otal ' CO CO a t . C llll !!!! rrVV € U l e , m .t.t u· u· ,g ,g i J: J: ~ a . ost C U 1 r V e :
will lnerease if de-
a. siDort.':lg€
'\Wn
U.liIii 1 : ' ~ l & t i . Q I 1 I -
J~r..i.~~
A. ] £ [ . J
4'0''''''[1'.1., ''[1'.1., i;i.i!l:IICe.. pr,Lc~ lf HnrI.l.'ili 'wiH :<:ii'il!l;tt 4'0''''
,A._.
P':rQd~l~~
f'CM'"C€ "C€ ir"€50~l'Cc~ ir"€50~l'Cc~
n l i a iill J d . i s ~ni(;ee l a s u e ,
[ ~ \ iV iV 1 1 . ic ic h th I'QI:" b f ; , F ? '
S i,mo:;l~:,t~ i,mo:;l~:,t~
~~
OOjO.~8
govoE!!rI1Ilmi;:;;nll:
'q.!tltlTlli:o.ily.
1be.!Q1;¥the
Wn
dimMii8Iuj!'D~ dimMii8I uj!'D~mMglrw.llll.til mMglrw. llll.tility ity
gCi'{iorj,,?
C. There
~!
,!:;L
'0- mm'CMill'. mm'CMill'.r~ r~ CQ5~S
th~ foUo\¥i.ng· win
~rbl'hiiilfl
gi....~~ U.nlii' pii!ljQd.
Sl'L.Ppi~y
t o o r.r. l€l€ !
Wh
l'
th~
i O ! JJ JJ g ' T I llll !!!! '!'! -
GO
ro
u. A t h~ greater
~~I;~!r.n;lDl!:-[ " Q l ; . h ~ " U o n :[,e ....r,::;I.o!o!
gorJd
pT.m(i(';;
;$
I ~:rm U r > . I l I t , I , : i J . · - o ~ H ; - m ~ Y i : m l . ; . ! ; h ~ ! 5I~:rm
,1
f(!l!krli"'['Il!~ ~ h 8 J 1 ! . "JjJl~rr~~aaoost- '\lVhidl to great;el'ef[jd€:(flC~~?
GJ't'!diBttl'lf ,aornpet~ti
,acti.OIf.l3 "rlfO'uM "rlfO'uM lead
\'ic"O['kerg~
c.
m~maa:r~~rugthe
'OUl:'l;e:nt
t h e b :.: . sl sl !.!. w o l ff·· ke ke [ h i ~ : :
h l £ l i . cost of hU!rh.lg ~ h M ·
p;.~~,u:ct~on of good
~.nt:.1'e2I_silfJ..g· J : t ; : : :
"!€. ar two!) ~tildl'tiQ!l'!M , c 8 ! l i c ! J . l i a t i l i l g th.a.t the w:lfll w:lfllt:db t:dbu't u'tL'l L'll.1 l.1flfl tQ. t0i~3i~
revenue
A. Decr Decrea easi sing ng t~J,e p,rodlll~tk(r. .8.
~'I;$ Q U J . t J ;;;; p ~ ~ ! t . L 1 l I ,
~~~$
""'i{!iI:Jpt'.
t r s r ,e.qiljaJs ! th th e - ex ex , E : H x months· ~ , E t l < g ; . r ,
the f i r m ' 8 finds t~;f!It th!)!! ~ : m s t O I I '.'. l.l. X ! r oollltrJb l ~ t 1 : n \ ! M.L'n wta~ wta~ reve revenu nu '5 ~e5!S '~h';:blfi r o . L k : i ' ; l ( " i ~ l g l'm'a~ I ' u . m . v e lg t.na.t w o d m r " Wh.t'ch ';[I'~el'irn to I!i!XplMH thifj· ( . ' l b ' : : ' H ! I ~ \ ~ i , ~ : r .
level (lor produe-
'ltbm.l. 'ltbm.l. of g o
D_ :~.rnp(lqin,g:£il,~:.£I;X ~ :.£I;X on tl:L'l~p.:rodndi-ijllll of gpQd
,Ei.\J\!Jll!eor
ei IB IB C t i ¥e' p;iJce floor on ]m]!osi:r!g N ! , ei
'8
g,CiQcl.
mMgil1JaJ
r~:n;;:l(_~tIICHv]ty ,of th-G fi.m'!i
:g i l la la ] :9!wi m a . :r:r :g
G C l B, B, ti;::l equal ' ~ O , ;;;; w m s . g e · to-
ta
'I,\1'(I\l:J~£!r5;
1 4 . S < U i )P )P O S iJi J ; JliltI!!t, if£!1!T~eJ;'
tha!l'.I, I1I:la~Jt~laJ rew.::lllllt:,
~J.ld, uli;!jl[',E:t~n:lLl. oM .... ....is
h:i:~
~8 'e{,I'lltal
e q na na l . r _ ; , . , ~ . M · g i l1l1 l : ! . l , ~ . . . e V 6 J : u ! ! l.l. e g!"ei::l;tel'
, ~ v e :I:I : a .~ .~ 0; 0 : ~ 3 i 1
~i:;i
t;haru
~'.Iski:ntjd, \,V.a.i:'~ers Hlred V1I)
IU]lI,t"g)on~
,eq~J.tI,'~~J~ ' ! / e n L g t " l
c ost produce ilII-1- a, p o n t w h t ! ' e ' IIljAl'r~i'r~alcost less thro thro:~ :~ 1II:t..c"l..r~~trla] evenue is less pa.i~.It
1::J 1::J
't~OIflS
meJ a! DcaJ o[l the fI:['{ll1ted, market ';:):111
of
!all'ldel'aIIloe~t 601i'.I.
~~ ,£i;iJlij~t,d,rtJ£iJ:k{:!!~
es
es
resources In
ot vha.l1Ige
, [n [ n c r .e. e a s . ]),e(}:r'(~.IlI$!:'I'
~hi.e'l,<€ ~hi.e'l,<€ greater greater acome 0, the f ' Q U o w =
Hkely 't have have w h k h
'}
i~.I.g_
It J : , I Y J I ' B s S i ir t l 1 l 0 0 " U " J . e tax S ~ r s t e - f l i ~i.I:~d.I g t u ,
p:d.~ Oilxtp~t
,lIIlOO'[,
,~rageR a t . . . : : Decreese
f.lo f.lode de~y ~y that that w iG iG h -eqll!~.i:t.y is
¥.~·~l,€lii!.:l' iOS~ ilj,i!l:rg~r~a~
til~n il,;OliIJ,pe-~itivi3 illdl~l:stIl'Ywith qim lIM cost ooJlid;~-
. I E . lead
o ~ : k . . .:.: : ~ : '
U[l;cn,%~
b.H,.".I:·'I3~8l;!
];ncl'€ttoo (b) (c) Increese Decrease (d.) (~ [! e . e D ' 1 : 6 1
~;.QttL~
UlieY
~r;{~ I l i 1 o r . - e
! ! t n o $ . ldld l l .... . :::: d
:mqs~; ik..al~v d.l£i;DI~'r$ i!
Nl!.llifJ
12 G$'m!::rnny" :nf1lQ!I'Jit~PQH~~L!'lo1W,IlIS!,d-8(L'Gd W,IlIS!,d-8(L'Gd .i:':lEl~fiC~il!iLf} : lEl~fiC~il!iLf}b~
prndl
:r.~lLfl:"D'9lt~~{f: of
it-o r n : w ' I ' ; [ I ! / ' ! a c i
co~rt,
f:!:',.~01;:~~~
labor 1 1 1 J . ~ \ ' [ h : : e ! t
!lll~'!J:'
"$ond, ;~hl;i w o I l I g e rSltll;i
COJlt
pNJ:u:ue
wiUli.
'title ('{I;UO.'i!I.':IDlilf,\'t!!,YB!
t€V5!~Ilt.e
c o : o ; ; t . ~Hf}d
Wlll!l;;n:t(::~1ii
Ilii!,:Uinbitlt" of um~l um~ldn dned ed wm:~!I]l
I.orr
is ooimpeUti,\'~~- the
~ ; h a n ,a~c:-
grwtf!l'
'i,.~t',kfo['.ee.
~owe:dng '\W.~1g€S,
u. . a : r ~
1ii~1,'tk1oI!'8
t-ll t-llta ta.' .'lili 'l.'iO:'l,t-
MMgill1fi'l
B.
':s,
, E _ ~ [ ,l,l ~ ilil :;:;~lL':m ! l1Iiliib"Vt~.,':II;~~dn~lj
, [ ) r . i o e o I::; g r ~ S i l A ? E : ! ; 'bh£'i.1ll:mfiX'g~nn~ rclW!I'JI rclW!I'JI L~
'Ci9."I.l5e
, a. a. j,j, ' } iL iL
t oo oo da da .n .n om om O gi gi ca ca l
cost
t~L!' C o : ; ; ~ "
~,
~he TIl!'m~8 pm{illLll)[.
uct J;ec:tet'l~_
and. re'!/{!trlL1!e is e Q .u .u a~ a~ . t o averfl~ tor n M g l i r .t.t : a i l
g l.l. '€ i!i! 3I 3I ' c " e fU l a l 1 l .
fO't"
fir'm"'~ prodc. r r ~ e lll:;:nk-et d i e L r f J , a ; l 1 i d J"Ol" '~hefir'm"'~
lOJIol!lrypoolkfbil\.".;;\.u~1· ~ o o f L l fQEI~llIii 'll!g ic 'com~e~itive firm, in 1 ( ! o J l l . g ~ 1 . ' 1 I I 1 b equil ihrhnn?
p riri c
'['.h market iSll.IiIJ'ply de creased
k'31'8-
,eljti,lii;~ :!lind :g;i.[t ~;~~r;!
:13._
~:eg!ll!l~:~ ~ncq\ulil'$ ' $ '~:a.x $;i/Sl;:l?lL1!i
e:::;t.':\~eand gilt
c.
.!lind iow'
tILX€!S
A~J.'OgLIi;:S3i''!,i'oe
h[gh e s t a t e
an
p , l·l· o g llll .'.' B si si l:l: v
i l:l: u :::: o m e t a M system an
'{~$~i,$fb~~;nd ~i.fl ~i.fl
: KA KA ,
p -r -r {! { ! lIlI 'm 'm r Hg H g (u (u a
hhl~b l~ b es~~
g ~ f 'tacX,e:1 ~O' ~O'W W
t~~:i;: t~~:i;: j.[,I(:{iiIT.L~
'~:$x 8y~tJ:'4llTJ. J;nd
8:l!i 8:l!idl dl~if ~if '~
NEXT NEXT F:AG F:AG,[ ,[
1.6, The oStll!lly .o ec cs '!,V,hich ,o UL~ fQHQwing'Y A , _ ' Fh Fh ( 'i'i i t G $ U n g
trolled Th
C O ' l ecerued "N~t
:pdmarH~4' of
h,
! J . I . r . t d ~ ~ 00111-
h, pa ~h~
{lo[ldiLiO'[JIi3.
,nUo ,nUoca ca;~ ;~jQ jQIi Ii1o 1o sear searee ee
unllmited Th
reoo11U"GOO'I
given
20 . A i " 5 .ume ume ' t h a J . t ;1 eonsumer ~~I.d!S m e {[I11J. th p~~l"i:~h~'i$('ll Uluil Cl:1I111$IllIirJ~r1~ 1 1 1 1 :r:' ~w g a Q d f ; i c c m e deubles ~''iI!i\iJl :goo,"walso d D ' L I ! b J e ' , 'tn.e (jilllli,Tutl:!;.'If ha s e d the lo\'!,1"(I' g :o: o < ! 'd'd B p u r c ha
"....n.
Wi£l,I1It'S
HI an
mose 'lihi¥J double
t:l:'~l,troJ~ut
· h ~ C J . ' S : \ L ' f , ; i;i; ! , b l J , ; L ~
'hti'!J!QI.iI:Li:~!d.£
p~:{!IV:i.'s:i{ p~:{!IV:i.'s:i{!Il1I !Il1I af U L ''I )
'1 ~ J r : : po, 'IC "
iI'
(I
the
'l:lvm:uIdC8
.A
lcle~1"Qtes
in hil!~ OPE-~~til;!,l1I,i.ty
,OO!ll~
h e , d .o .o l h l
IE
C- 6hort-r'UJIli {l!.VeJ,'3g.e wta.l c o s t st,aut a s O l lll l .1.1 , P lLlL l t lncreases
i[~f
D.
ts
1::'l ;t' t1l
5 U J .p .p p~ p~ ~ /'/' o f an
output
tt~e de:OIUI! Id
~:c€ [Dl' ·8 twJ.po--' the silt.im silt.im of £I Ji;e~'~iLH~it excise trot ",,:"tlll !d 'C&I~il:~ U.l~ ' ! ' $ I l , T u d . I . I b : r ; ~ , u : u 1 l H C [ . I d ~9;!l"J.'ti:~.v g{~r;;icl",,:"tlll d u m , n ~ ' e iJ:!! w h l e h of th r O n Q l , ' l [ ~ n ~ : a ; y a . Price QlI!al1lti~~
A.
c. I u erer e asas e tiiecrease
f"€ITJi:!ki:r15 f"€ITJi:!ki:r15 OOIli-
in
~qt::l.~.0 9 8 1 : . . d¢(;.:t·""H$~
1S
'~'€tI;~S
.A
7\1)
~3m~ ~J:O!lIi:li1::;l
D_
D e c re re a s
.1
'~~£Iilll:'ii
Jt;r.E.:i
c l ~ I M : lgl g - : : :
CIJ.~~,~~~i1;1,iIl}
collude
~hil ~hillt lt cons consum umer er eons eonsid ider er po,t po,ta. a.to to.e .e 't be r~ ~~lret·i.ol" ~ood ~ood,~but ,~but cons consid ider er ! : ' . i , . D e [I.ol',mal, g{~r;;id-,An i : [ ; t c J : " ; : ~ a - s In ' ' l ; " " Q L ' 1 8 1 1 1 T n ( ; ' l r : / :i,IlIIJ..'Qm~ ,~!ti'~H, L ' i l Q 8 ~ H.ec.t the e.quill qJIJ.UHilti~~~'of ~:ik'1!!~~~ e.quillb' b';l ;l'.'.hml hml of 3[11:1. riee 1 . 1 1 1 ' w - h i d . ! . or th,e fo.uG'~"'iTI!,g'W:~ys7 potatoes A~Ull10
:ffa :ffa,m ,m!l
'w m a : x h n i z . e
't.he produc
l5
fln
i[.I!,=h!iS'~l"'y
f:QY
w H I , be
A. 'iMI. ljJ~lto the liIlaL'glIJlal.
B.
~'I'~(!.Il5~~,!~$J~d!y'
'~l!iehj,urnt l l J i J : " o £ . t ~i T l e " price
eq!ll3J
pl'oduction.
to true . f 1 \ r e : L ' a g m : tot{il e o s t .o p r o i i ! l l C > -
ti'OI1l
above
~Ilt:' nM'gi!tltd c o s t
QII;~~LI1I!ti~;y
above
iAh,ot":
Decrease
DBCIrii!tli5-e'
below
t l u . e &vt.'l".(I;ge i ,i l: m 1 . . i1 1 , i)i ) ].] . e
Decrease
Decrease
Decrease
Deereese
:~:: :~::n~!["e~ n~!["e~
llil i 0'J."{'!I1iI~
1).e0t'8:'JlI$
]I)(>!."(:n.t ~11i.(~
Increase
[i'ecr-ease
Increase
Decrease
,Pr1,ce
r,1S
,is
"'lr()!F~r
-ci'l!arug,e
Decrease 19
t1,-ei?-:r~~
22 [,i: [,i:;I ;Ioo oo~; ~;ik ik prOdltlm8 ito::'/I ~'~JlIJ.n~ a l l l , 1 l l p . t \ y ; - ; iI!;~ch W{.!Irkx'i;:i:'" IE;'b;~v . .'.' C IrIr k e r ~ e a n perweek. tl[',ail!l!3' p . B ! I . ' week ! l . t [ , j , d ! , V J O . e rs rs a 1 tralas t, ralas pel" ,o w~e1c T h f l : nl<:u:~.lfla~ r o d . i J : C 1 l Iee~. tl I,C slx,th
] l flfl c : :J :J . 'e 'e 3 S B K l 1 I t't' l'l' € 2 I S B
Increase
Itb"l.e
inCl:~fic~~8 :!)I,~:rltg{~
decrease ln the price of chal chalrs rs
As me
doubles
~O'Iiigwr!l. ~O'Iiigwr!l.ll[[ ll[[ ,aVe1"21g1 ,aVe1"21g1 ! : ; c i t . a ~
rn I'tpu I'tpu
decr decrea ease se In hls total .r.f:W1IIlJe
~. pu
OI IIl;pU J.'~w~ ."J.-.rJ8I5 €S
of lumber it
a~
1 3 . _ $hoil·lt-:n~11J U\'!,I"-e![".ah.~ ~Qta! ,cost
'pmduci"n,I!l;' ~1bles
D.
of
'QI!xtPlll'~ iJir(}d!l;l'C~d.
inerease h~the ;aljwOir[[~'~ {tI[ time '.i'Q~~ bJ' procl!·~[~gng ~;..I;l,b~~ ~ 1 C [ . 1 . ilili ilil i(} (} 1·'!'!..$fie;
<:l~l·'.i'J~:
{!If
M.I.
~3:_
dQ.t~b~'
U'!iil!::::!:i !:ilzy~ lzy~ ,or: !J~r,i!;d ~ [ ~ ~ & m ~ d J 3 p E ! ! l " . ! d ,Qr.~ U'!iil!
"Iri:s w u r k ln t ilil m - e t o p ro ro du du c id .chah's. A n . L [ l.l. cr cr :':' ea ea o hl ~ h . . e demand dh£l;lr dh£ l;lrswjl swjl result result .ii'll
l\,rir. G a r . p o e r u . t
r'Ot
oohav.to.r
t,h~LIlI
Il'lot J l , , ' I h ~ m 8 , ( ~
issues
d ! ;e; e v ~ W p l IT IT ! e m i gi.'QIllP
,i;}or.l.dn~lv~ ,aIllS'l,'!."lJ~rS til)
b' Iess
lH
,pl",oifl1u.(;t:'i{tlu'
mm.lD~poly .p:idre pf l,iro-
d~U.::tiQH
GO 0,[\1 TO THE ~TIEXTPAGE
24 [J
lr as 'i:fl
iEU~ j:D}QlIistt.y
Ll'Id,~:;;HI ;;HI1Ig:~~~sn{ 1Ig:~~~sn{l:l: fi:l:"rIU®'~ p:rc~d!,It(:~Ll'Id,~:
mms,
other
lII.'(:~
mand
the
rr(!I rr(!I111 111
M.u:~, each
'~rJal'~T~::L~
~;heprod-
i · U l d i ' ! , i ' i d l u 8 . ~ fimJJ:i.'!1.deI IL IL d
nt'"IDi, d O ' i1i1 l . f J U W 2 I J : d i l - O p ' : i :r:r u . ~
and d H f : { : t " ~ l t
each
f{lJ.["
hr:J:"L1'!I, dO"i¥I1lv.,r~l.;I:"!J
s L o p in in g a J J c I i d ~ ® l l l t k a l
D. ~ l , Q ' r . ' . i O O ' l l t a l and Q!ffel'€[l't
E. horisontal
th
ir
fJill'
is different '6.mll iw t . n 3 l ! t I ilil jQ jQ n o ! P O ! ~
ooi:;aa.
ve 1g t:;osiLcurve
has an ,aver~~,e b : e d r~-!;l: f u r . U~' hI;) r . . i : i&i& O l l " l ' tl~
eueve U U < 1 i , t is
us
:5.20 5,3[!l
:S-'I},,5Hj.nl"
$".OO/hl: $6,.50{bu:
.::]
5,40 5.. ]J
S-tt,
01 hI
$b.40l~f
~S-6·,.'90/hr
ffi~,30/h"!r
~el'll''N
~ts. demand
2 6 F dr dr e
d ms m s c a rn rn iIiI i M i o[ o[ l
A.
D.
2A
E.
5.20
U l l ; e . ; ~ !~~,
p ro ro du du c r
[ 1 . ] NOlllpa ex / NOlllpaY~! Y~!fJg fJgons onsume umers rs eannot eannot b e > ex eluded f l · · o r u , . l S ' L ' l ! l lf L i l i ': l . g the ,g,ood,
hB Inelastle
s_.eg[IIIe: J: ut
(if its
GO[ISU11I1PUo-U
does
l\ijd~,1lXi
dill;!;
gL'ea'~eI'
loss
;a'l,l\e~:,agto::
o £ i I , 1 i a l ~ a J b L H ' ~ Y Jf J' f tli)~
[UI. [UI. Th'8 Th'8 MThOILurt consumed
rod. !lid, is 0tilStic
ri
than
t~J.~U:~ t~J.~U:~ ~~
:iII,~r'oUb.~ :re~[II!l-e
;:)~~fl"$:r¢r.lil:)~n ; 9 1 , p:!:'O~l~llC~'~~~dm ~~~i{ill1l,
I, - o r ~ l y
C_
o .~ .~ d
.. a:1.l~. H.
tr
1Ji:1,i!iJ'g)oLil31003~S
p; ;;ij ;;ij
aniy-
its .a"'ij:~;l .a"'ij:~;l'a~el 'a~el·,e;"' ·,e;"'I.ie~ll I.ie~llIle Ile
difIel. difIel.~.' ~.'tl tles. es. ~n
11IQ'~
lPeJ.'SOOTI
geed 'w others.
, a; a; 'i'i /e /e I . a g eb::isrt : is
. p'l"o;fllld;~
'.:J
whie whie of the [ ' {I{I o H o w l . lili lglg ?
ClLIl''IJoe,
the
"",-(n,l
ilf~CI:"-~.as~ th&; tL{!ly:rl,!!
1.30
0 o C C l J !1 !1 r S \ 'f'f ~ J; J; e .I.I I I
s,lJiJlil_)ly of
h~ ;the.. 'tahtie :;}bo'ile'"
iiufm:riI:i2l,tiOJ --:1
0-20
a.1"ra_'!,1S_
deme demend nd eurv eurv
the
to
~'!;l,I~lft.i~1 m l ; ; , ' 4 ; l!l! "
29 CnM~H::t'E!rls~it'lJ of
H'I;~L'~i:I1I:!!iJ' !.!. ·-· - r W ~ ~ ~ ~ l ~' (:(: u : r . . .... . h:;t!;. : ( & . H'I;~L'~i:I1I:!!iJ'
~ O "/ F~ ' "
:~,2
l P e J : f u C U ~ 1 ' ooJJil,p6,tit~ve
A.
$8·."IO/hr
p:roifU by
irl~{fILaCiLl
2 C l 1 MQl1!opoL
-s-tUO/ku:
'],3,
28 A u c --aa ~ , \(\( h
f.i.I',[l}
s.to
15
fo { 3 V ' e ( 1 : " Y
Cuslt
$5,0'0
llli
diffe:J!eI~t far € ! a : d 1 J
~ , 1 IB IB . .r. r g irir w
e'lJoefllle ,Prodru.'ct
Ff:l.ctar
lj)\JacgBS
'],0
CUJr"'If€
.8
H o ,u, u rrr r l
Number of \tVo~:kers
;:}j~~V
ZU1I&
~r.j_,te do [lot re IE. difl'eJ. difl'eJ.'elf 'elfJ,oes J,oes in a. product's fled > C f t . i t r o : : : m : c r r l o U e s i~:1. cost cost of PWdiliC!j·kllU [,
eu
if 'rIir~'e
mark market et resu result lt iiI:ui!
[.1'1"
'~i11~ ,f;\._
increese in.
iP'-Etrtic'!Jlm'
labor
~lfl, ~lf l,~, 10 ~i:~ill.:lrut decrease ~~;1mplov-
~llTJ£L1Jl
. r i : ; l ~ : ~@,JbDi[ ,1
r . ~ ! : : ! = : d ~ c ; ~ ~l:;tSt:i!l;: Y'
r~J£i.s·tk B_ '[i!!~a~uv( '[i!!~a~uv(~ly ~ly 1I;11Il:i:b
,ek1f';t~oJ;
,1,\$~~,U...i l ~ 1 . I ' ~ : w ; d , £ t 2 : i i t , i c
lilel8.s~i~
G( : 0 ' . [ \ 1 TO TH
XT , P A G ' F , .
30
h~dJ h~dJ
be~~\lffl:®ns ,h ,h H i3 i3 d
un crll.! crll.!;l, ;l,LlI LlIlgs lgs 0",1'€1'
to incr increa ease se MIt:: &ap
fuH{iiYl!h~g tends
.and ' !J A inin ; !!! : ] . ] ,
"'lIUT~'€T$
'~iLliII!)!!'?
A.
ilAiI"I" lBktll lBktlled, ed , i1fl'Cre~ in tJ~e demand fQL' ilAi 'l/ilOJ:ketS relative sklHed 1NL!di:(:~'1S A,[].
';;'\,ill
ll.Iif!~
1\ decrease iI~ VilL!drersrelative
med,
31
. l1 l1 l l( :n :n ; :1 :1 f ;L ;L S i J'J' . l n i J . , . ' " Q , L i T l ) l i l
t:lll:XOS by
3'-0-
Gq Qd ,l-SJ ~L~i,: n f ~ ~ . i , { ) ) r ~[)d, ~Ll1Id h~g o w e ru r u m e n t d e c: c: ~ O O 6 o n c om om e 'ta.'100 'IIyjr : n . O ' 7 t ·
'~"'!i'Q:rk"6rt:i
to skiUecl,
'W()l"~~,"S
n£ l,l, n D _ . A . d~ d~ n sa s a S i:i: ~ In ~~It:h dLt:! d: u n£ tine e H l I p p z y ' 'O akmed ,,,,'O[(]rer.s.
E.
e : :r:r [I[I m ~ IIII l
Sk.i.n~d \¥Q:l:k-·
:illltn.ilM£l~lu th~ supJ:1y
ers relat relatL'I L'I,{~ ,{~ to
guo.d, ~mrl d.l.e"giN~
D.. Good Good
Q r ;IiI!I".Id
Ck:lfllti!tllldi {m an AliI increase till ~m.pp,l,r , o l ix L '$' $ , L d!d ! L e d 1 j . , ;';' ara r lmlm r .
['b:I:"' £tn i$OOlIlQ:r,Ii~~? ,~!);~
:MiI:~~[';~~hHil1l,~ :rouu,(:lt:i;{!l11l
,,f,L f,L
curve, wMc:h 'O the
'~.S7i.ibmtioo ~'1le?
ll
ililg '![[jiJ.lf:i'~ be
(OUCi!L'i'
T~te ~oPl,)ortlllJ:~i,tycost {iii: P [ " { t i I : : h l c L l 1 I g
~,I([I~h-eT ''-'!nH;.
'[)i;)[J$bl1lt-
[1]'.] JteOOllll'Cc~ ~1J.\eoom.pJdeb~ ;:1d:~:ptabBe to a !t!t e r.r. .l.l IiIi a titi o :;:; , u s e s , ar
HI &SOUll'~
u ssee d e : B i c ~ ee11 uutt ~
an~!,
B _ ~ ~ olllly' lo ly D . ~ an an d
IE_]1 ~ l1l1 IcI c l 32
~kf:i,r~ed,as as
C t ln ln S l/l/ ii:: i:i: m llll 2: 2: 'l'l :':' " SlIi,t:[Jh.1S
,/:'\'_op.i;l9:r~~'U~;'~r[}Q~!t. [}Q~!t.
c. the
reve revenu nu
n~h'l1J1;S'
hl
t~ reso resour urce ce cost cost
'tney
of pri;f.':€ of
t.h~'v:t).~;!,~!";!i that.
tt~~rice
D~at.."eQ;[~ :e
,p.i:l~
of eJ{t.e~·T~a~ osts '!i,;Vh,~(~I,
pa:v
c on o n su s u me me r
UII(;' I~Hfj~:r:-e!l"IC{:'b~h"!lwlll COn51l1I!1letr8
:r,e~l1IiJ,:1;;1
mluus mluus Q'[) Q'[)po port rt'L 'L~I ~Ili" li"lt lt:; :; oat
dHffe1"8:T~Ge be;tvl'<:OOIJI
a cg c g J d ,u ,u e p r e e
Whir'!'
tl1:~cl
bel~.e:l]tg
till;::; roUIl}'l/1,i~!I".Ig '~/ii9!1111d;:.i!;l,l~~ th!';,!; (~!J!j,~ibr-I\!IlITI,
to
ir~Cl,€M{!?
good, O,[¥ ' [;[; h a l i e e d u c e s
3:
the
new
rt.eclU10~,~
p'nlitlilldl1lg
llilpl(l~n llilpl(l~n ~:hepro~:heproincr increa ea es
e'iBI3IUtiaJ
dllldlD,1ll
of.go of.good od
'Y are IQOlfIIi,lPte.r.m1Ie.I.~ts; and t ~ , ~ gQ'~nl1l:l;e[l,'~ iLin:pq$!"iJ'S :.'JL '1;::).."[ on ggorl y.
GO {)t\1
NEXT , P A G E 6,
s!lJp-ply
,gir.:ll,:ph ,gir.:ll,:ph ~1b(i1!#le ~1b(i1!#le
,gerr:it:~':d anii1Q~'iI"J!D~ an a .r .r ~ k h Q ke ke . d ~ \ dr~J.r:'l!~L¢.-' i~illy e d e s 0 . 1 e 5 ,i . ' b : ® l i h u m i of d'evelopmg cancer, l iIiI lili JJll M .f.f J' J' lili lo lo o u sl sl y a n h~rest~tiol1l o f I J . tu tu ea U I : l t l c . h o k e W e c v s e J ie ie l C ~ d a me me g e h e C " r o : - p ' " \iVh icli.l. r: '!).he ,foHo~"·l.l!1igWin d k ~ f E ! I " . I . m ! b d y oCCI,~r !li. iI.\I.:!SUl:tf
'qJi:lF.1le t(}l'
~tticl:1Jo~s_
A_
h~
~a,r ~a,ri1 i1"g "glM( lM(t~ t~
~,"M :!ti(:lildk'$$ill
$-1,U~f,;i!,:'i1'
pri(,(>(;
B_
J1£" J1£"
:1,lUoJ;ru~L;;N,!i.
s , r ! t ; L c h a \ k x - l " . \ l ,,'riH : i n ( : r n n s o J ; " i .
win
r,['h~ d , A ;!;! I1I1 I .1.1 . :;:; m d { :o:o . r ~ ~ r b ;,;, ~ ;};} toto k e ~
cl_.t1cr>E!:'"~@$..
qllU"iJ~tj:ty of n:.rti!!5hi(!;k€S grO'l.V~ win dil3-
crease,
~mJl ~mJlre re or farmers wh 8,~d 8,~daJ aJi~ i~ will decrease,
g ~ : { t r 1 N i : n , g artlchokes
in
ttek€lt airline 3f Th ~ypk':.aH~~ L m w c r if 'tt.~a~e:l" l" buvs the' '~i'oket 00 vera vera weeks lo ,8 'tt.~a~e: J H g h~ h~ ,
~ ;~;~ ~~ ~ ~ : '~:t.j<1,~r~r $ iLiL n ~ I:I: " Lh'£j,l,1J,o
~pa:
dep,al't dep,al'tlJ] lJ]J.' J.'€'. €'. Thl prlelng prlelng assumptton that A. ·trnvc.Le:rs,are
~;t,_nl;t6ID"
is besed
C1'I.!~ :I!Ul:
aidine
n'l] n'l]'t 't Mv,a Mv,are re
. ~ r l O e sehan e hange ge acro across ss
B_
thl?J; d ~ L y
t,hYlle
~,[,~\ ~,[,~\\,¢ \,¢1~f 1~f:"2 :"2;i, ;i, do J.l'{!l~J h : ; l v T $
.$J:~I:$iI:"[J
a h : ' i / 4 i i ,unode5
of '~nll1ijJiP '~nll1ijJiPo![' o!['ta'i. ta'i.;·kl,r ;·kl,r
tr.e!'vciero, wlll P & " V a;lTIYprice '0 thf! depoctUJr-;~dat appreaches
th a"TJ.
fi.~'1N
'E
argi.lli.al argi.lli.al cost ,bigbeJ:
;;lij·rp!a~.I.{:
s~,t~
tJ:u:::' last f e 1 ; \ f seats OJIl d~a1; ' O l ' th 'ihst
't.hi!i.l!i':l.
~;r~\\'~.ers'd ( ' ; ; I 1 r . L s m d b(~oJ;~LrtJ~
t~ de,palrtl'llW date a'PPl'Oacbes
,r.;d~ls'~i.c
~il'il r:r~(JllJ:l;o~ogdcal a < d , ' V M . l D e s
I~
lead
d ~ t , ~ 1 8 f 1 < s e ~.u i l: u , IuI u e t
,Ell
STRATEG'y
i2..c~I:''t.!l
High
increase t n 1 l i'i' J2 J2 I J.J . ··.. g i:i: n a ~eosts
:.. djseconorni djseconornies es
Lo
{!iF SR1J.e
1t" ,~'1if1I ifl'~~n ~IJJ'lUI! , ; p 1 Jy'
3 7 ' M a r g ;;ii ifif ia ia l .O .O O $ 1 ; i s d~fhK~l· the CiltiLuge
f.e5
W;Lil".l$ ~ , r . a : d d i ,t,t ~ ( ] n :::: 1 ~ ,
B_
B)i!l
uh:trr:lg rofl :p.ro·
1I;11"II:i:l
{~IJ! ~~1i~lt
~»"St, :r''"-':!$i!.L~~,L[.lg !rQlfll .f!dditit .f!dditit1r[l~i 1r[l~i unit if I [ 1 J I ' l U t
i :;:; Jb Jb ~ ;l;l ilil bb"" ;(;( !
1.111
d[('eJ.'t1[lcCll3!
tQt&i
'be~tJj.'ai1:!!il
dYi'~ ]UlUOwlllg
PRICr_l'qG
FIRlf
decrease ln a;v:-.:::t.~ge tod:.al,[!osts ;&
O~'!i.
,i:i'j:i'lrt!l'~
a~:IIncrease ln .ilIl"'l"gh~a~U~mty .R
bi0!~¥
QiI!.II.,~stion :SS-:39 are
rota 'I
'1,~f;l(1Jg
( : Q S t and oota~
V , a : d 1 1 b t e cost difI'r,~:l'e[l,ceIbet''!¥>ee:uota~ ' v a il il .'.' i~ i~ M r o s {rrlt~l
T.he T.he Pil! Pil!.v .vol ol
and
:fi.x.ed eost
: .... . d i ffff e l\l\ flfl ;u ;u 'u 'u i!i! .'.' : :::uvt':!""~:i(I
etw
00111
1 1 i , v e r ."" 8 I~
'IliilJ:!:iilb~~~}I;;!~:I,
t{[Jul e o s t
above gh.res. i.~ pl'o pl'oHt Ht
:ffJ2I.h:LX,
-v
,~h"-11;(li;!i';i 01:"tw
~L'h~tl ,",dfh ~h"iii!' s~I::H,~Lc ! I l C . h . l 1 5ry',
QIi~'PCllli:sti(::
and
· th th e pmnt ' t o . flrm
b,Fi~lr$d b y ( Ji Ji l)l) itit P1 P1 '1 '1 t
asso assoei ei
Jhil".r.1c'l; in
~llll
'fhe fm't e!1!.tJ:y ilil €oob C'en the second to i iIiI ' B ,
A' firr firrns ns coll collud ude, e, w ' O ru ru ~ db db e w ] :!:! l , e (!if the f D H m * i l i l g " ?
Ull,(!! t\'l!'O
p ro ro fifi t
F'i'tl1r,t
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steo
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50
50
each ~ m : - 1 i ! 1 8h~.lIIlta f!.'eOill. f!.'eOill.slv slv chcos es i~ P;!."iCJJiig sl;r,a~g. sl;r,a~g. '~~i'tb.o '~~i'tb.oljJ.t ljJ.to~h.lsto[.I.~ Firru A'IS,[ii;IilU Firm 's ) r ,o ,o fH fH s w o u l 'i.v,hi~.hof: 'i.v,hi~.hof: tl I,~ fo.l h't'iiJ.U.g'f
(ac} (h}
firln A ~ S P 'R 'R O F I l SHiO SIOO
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g,],.:3Q1i g,l@O'
(e)
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iL')l}1ftJ.]! J.]!etitj etitj.vt: .vt: firm shott ,~:I!IJ~, Pf:~:r"OCd'y iL')l}1ft shol!,:!,H l!ihlJ.~.d(,]i!'>V,nI wh(>!inil.l''ilti~' th
'Whi~.:h {~U.lA;: fQI.~DwJ.ns?·
'!/;!ji:ri;llJ b~{~,oQQl ~xweds
tLV~r~g,e
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mmnj mmnj,m ,mtl tlLl Ll1} 1} ,ave ,ave ag
tot8 tot8
e;-;:~(16
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perfectb
OOJilSt;::--'Illt-CD8t~
xnn,p€titiw xnn,p€titiw
I!.
.L1lId!1!:L.;;,:,t[j'
is
he pric pric o i j I f
will d e c r € ! ® 5 e ' , .
[prJ.,ce
m~:~t
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fie
1 I tftf .P .P l.l . .
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,=
.[
i f.f. P p
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beeffieient O O t 3 i . l I ! S f : mar-
m~'Lr'gl,I1I~J.b!l;ll1lll;1~h~~nd
b e n e fifi t
" h I )~ )~ L C ~ '!;;if
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ill
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5!J!ci~.l COB~lmpoa ed 0[1 nO[iS!:lf'lo nO[iS!:lf'lolre:r~ lre:r~
true
Q P . p ( l \ L " ~ ' u [ . l.l. i ~ ; c o s t i s ~ n n ~ : · ; L i . ! i J ; . 1 . i wl'1~ch of ,thi3 fo!-
~ot\'in~!5itlll.at~m:Jg'?
)P ",'l("
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will be eJ]d eJ]de: e:r. r.u~ u~ it.oo he ilI.i.gb,
'INm
{:Q$~8-
i rn rn ~ r !"!" 'g 'g 'i'i .I.I 1 J: J: j o c ia ia l
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have
f;iI1J:1,Qkti~'-
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f;a;lIl"Ji f;a;lIl"Jill.y .y
deoides
Ml;e.nd college
flil] ],~;['iI[L1;e•
fo
labor
~\lilli, to,
:I.
tleg..
IVJ$HL
B.
:(Ii
'1;.1]0 low' too hijgh.
c1;gil;l'e:~tes
P.7:..--
A1.P
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ln
,e;q,iJj~ Jj~Hy Hy dis Is ,e;q,i
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The leaiS~ ~.t CODlbLI1l.8,tLOI1l of Cl"Lpit~ an ~3bo!f' \1 00 ded oproduce oproduce ;j. gj \re'1ll w1" .u.f: the fDUO'ivtn.g? ! ev ev e~ e ~ . o f O!lltPL~[.. is gi,Vt::llI
E_
come
but ,the q,ual'.I.t~t..v q,ual'.I.t~t..vsold, s old,
( ! ! l t l v ~"ll,ronputs, , e a : , p i > ! A 1 . l ( I1fUl:rgin~ ,hbo,['fL} 0 0 p , ]']' ""'' olo l l: h lL C € it output, mi&JJ.gin"'Ll In·,oif.lll In·,oif.llli,tt i,tt , p : r . o J r L C i I : . of 't.;;; 't.;;;icP icPital italbe be M _ P t r . , tille mi&JJ.gin"'Ll )('!; ,Pl\~.:!lim! , o ~ ::: : 1~ 1 ~ '~ '~ o ! i \d \d ' P f ; . 'tJ~e. p\l."k~ tlf {!:IlIl'~i~~~LL '11J.5.et:i
(if
ilII
qjlli..af.ut.U~vold a f.ut.U~vold
irJ;el\fi!~.
'Eoo.!1 'Eoo.!1orn ornic ic protil protilts ts
'0· (~,r
'COIfJi'5HI1fIJt~ion
s[l:lok~ ~J:g,eo'I~ general has ,J.e~:.e:t"lll~ ilJg C , S , U 6 e 6 cancer au he&. he&.it it dise diseas as fo iv at elgarette l?tkes ~.'C d r : : t a - r . § l " J : i l 1 l . e J s m o J> J > : e --mm l -u -u d £ I f r ~l:I. :a .fnil-El, [r.Htr.k~!!:., w,L1~ch ~f: the ,ruJ.ll;!J1;l,fi:r.~ 'w]H, br,,!; ~·l'ne?
iL!JCJ'OO6€!.
eono eonorn rnie ie prof proftt tt
:B
'f~~'ti,Q1i!
lIfi The
d e er er ea ea e e . .
fh,m
;fj
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trib,!;Lt~~in w ! ; ; iii £ iUiU : s i l: . Q I ; jIjI \ I!I! , n tdtd r . ;;;; S
ill ir€~_1ah~ Illndl,fl,']f1goo-
Th pric pric
E- T l I l G pclee '\¥iU
AIS.~UII!1e 8.
'O
in
D . , E · :::: q: q: .h .h l lili l wt"l)' d:ile~~[Jt households diff differ ereu eu iJl! iJl!1u 1u~n ~nes es
1II1an>,Ji 1II1an>,Ji[l[lall allevml evmllllliiii
iJ~ ~01J.,g",F.LU~ eqlliHbrium. ,[f .. d e : , u ; : ] J : u j , rUt '!t..he good h~~;r'etl:SI":$$,: W , h l c h oil:" t h ~ ~ ~ O U D : I:I: IlIl IiIi :g:g \ '~"'HL oecn r. ir~ 'rljrr~? f\
of ...€~Ul ln
to
nation
m6rr~h m6rr~hlt, lt,aJ aJreve revenue nue exceeds exceeds I T J l i H . · g h i J a B iUllSt is
~l!l!1{!1ll.1rMt
0- S h o t llll l t h e a:moul1it
.prioe I i n ~ : @ , r u . m l c o s t @6eOOs
41
cost
OO{tiI1l(H~JSts
par$Q[.I£i the. d.Is~l"~ d.Is~l"~bl! bl!T~;.Ou: T~;.Ou:{~f {~fpar$Q[.I£i
Sh( .'
'price E-
u s e d b\
lJ4:
p!!ll",d~ase 'I,I";!ji.dabk~ ~.'-QS:t IC-J:L~V.;;:;
L]
E- &'~nlg€ ,prodllLd
01l.1l''Ii{!
S8>ViIl!.f!lB
~,'!lIW
to
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;;;0['111"
n~y
[r.l!M'~il1l.S ,!iJ.x~:$ x ~:$ 'L Ct~lrvti pl:"O dil,!A,:i
~~
farmer
'l/Iihw"t~lld !~
t{!lt;f.jlJ :r'i3Ni¥lIllilQ.1I;i CiJ,;IP"(~
l IT:~f~gi ,I1I:!:I ,I1I:!:IIJ IJ :t"~~I1I~,I~
$2nJ'tOOO ,atfi:i:,onmbHe,. L J JS JS " e
(:IJ1TVr;!i
:13._
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and
Qfij'ly 8cAU
11]
1'0 T H I E N.6XT P;~'l:G'E
he de
m J {tit gp
d~c["i!!~,
gQod
d~l: rice {!ii'
Ut
be :or)rJ.chJdi$f~ Lna'i.
{:alJl
51
WM~:I
r~.r.l. £I.V(~riilg'ri!= '~[')~,£J.l
~~:tI!iyibr.s~i·ti!.Lb~mods
allieR illlld
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. lili tltl J l
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'i
Ml.d
h~ 'I)_
;e.:n ~:r,I'C ~:r,I'CrE! rE!
~h
:rnog~ 'O
burden of
th tax, tax,
bear m os os t o f iflg s a e s or s k
,'i:@
U'
llrorh~c f$ w i l l . te ~~1);; equ:1Uy.
I 1 l $ i u I1I1 r . I .E .E l I r S u"I.I:d
wi
'~ille
eqlJ.lmbJ'lu;r~. price, ~Q:r. this f i : ~ , I I l J ?
SOO'i,~
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~rnan:~
~'~s"ales w i berure.tlted. D.
Its
Jen'b~nd
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iu
to
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r ~ ~ TU TU : 9 l
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hi.a,bh~!!.·
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m.:-,Lldlll'Ei17 'Ei17£$ £$ ,rG~llI!l)ii ,rG~llI!l)iij$ j$ wlrn"Ll'I i'~m.:-,Lldlll
i6 i!I!i~..lruj'z133 r-roJ:it
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fQUowm:!r ml1l5t b4ii tt'lJ.li!3?' I s i lll l !i! i jJjJ ~ w : " l~ l~ l ~ '
'I,i'{1I.a.,g€
product
1,lIIi!'l".8;g€
,pf.Ci.dlnct is dec~\ilii!ilgr
l\4a.rgirr.!.alproduct
is
i!JlC1iee5~-
D. 'fut 'fut;f ;f iB produ 'L if decreesiug,
~~.~ ~~.~
~I:~!::!=~ql;~ilibdl!UH~£IultJ:~.Y ~ql;~ilibdl!UH~£IultJ:~.Y
ma
tn;:1Jil:1
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of'
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if
it L I W im, a o c L m U I [ ! . ,
baef baef ol
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equal tQ !fJ"UiJ;:~ir~~ 00$.
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P J . · o ! J i r t , Q G d ~lJLclrj L.h~l~,
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Ma
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~:n a:.h!(!:pdc~ p dc~
an In
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IC~'!.!.$i:'i<
d'¢c!r.e:9!~
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P'!!'h:e
iI!;crt1~se·ln the. p;!.'odnctiQ!l! {!IllH1!! results L I l ! an e q l l . l a m ill1. ...::rease ilu the productlon I1 hrc.~.>e'ttsein the m an an d !e."Lthe~:- ~ ) j t m .m o s t , ! l l r e r y :;II
Tii'!!'i,!"€!J!.II.le
bl'gir~ revenu is ooS't.
~reater
of ,the
Sill
,A,_
b.rg b.rgtll tllia ia
abl~ to s e l ~ B!IliY O ' U J t p u t :
iD 'I~ot
oest
tal
,K
: :i:i lo lo p u n g . .
[,(~,thEr s m c l
A-
t .... '; ; pdCri,i;
m B . will
viiU
o f O ' l1l 1 I tpt p u t .
M,~r'gi.(1j:lilJ rn~rJ:!l'e!
.LI1JCfeMe,
ec ea
ds
'\i'f)I:dJ;tba®
Its '~o;~areve:m '~o;~a reve:mle le w i l l ~[I.'Cruase. B. ~t,spl'o6' pl'o6' wil
(;_'Qfj!!;s 8 c J J L d
'll.81..aable
.U'J-IM'::L'eaSl:lilgave~!age
1'5\1"€~
oot· change.
(:(~rn:I,[X:!t,r~i''lffj.ftr.m. 1l I,I, c~ c~ 1 ~ ~ f tr.m. . i:i: 1l
rJlI";!i.I:f.t§r~'IJ?
h ! H \ e l1 l1 l
'!,!Il,in
I T b i price
vm:i.tl.bJe
~'ulW'~a5~lg&'!,<""€f
6 1 ' m . is '1il1.i1~imi2iil1lg shcrt-run prof~ Assume ' ~ h f J J t . ,its a ~ l i j : t h a t ]Jt~l1e ._greate.r.' than ~ a ; i J ) ! ' r a . g , e)ffu'!aibBe 8 1 ~ Vh Vh i n f , th th - e . f"f" Q . I,I, B O \ 1 l i: i:i: r~ r~ g - Inl,~'5:~ l~ ~\l.·u,e ;$;~ ihf,i!: firm""
C. Prod Produc ucer er
etUJiI'liiB
C l " ' l M i S h u g a;eni!!:":nS bur,~llliJll bur,~llliJ llI.I.
of t ! : ! c { ! , ts.K.
:H:3Q'~h
E.
in sal£!8 t S i x . 1
wn b~:r
(~Ll'ISi!:Lm~rs
La~t' a llll id id i e ve ve I1 I1 JJtt ljlj J. J. aB aB . l:l: :;:; . i mi mi :r:r [i[i sh sh , LI LI 'J g re8,
Cl.'easirug Cl.'easirug returns
the [DI_ao:'l{eit dema demand nd .for .for .gDOd. is i r . ~ - e u ) S _ t ~ e3T~d. [.he s r L l p . p l . y ls elastle, ~ ' i / n ' h i c . h of ,the fo~law-,i~'I;g is t!'1a!!: ' W l j '{ . , ' i .[.[ ~
~Qt~!,f ~ x E : d , 'ooSi'.$ O'''''!::!='J: : I ; ! I.I. l @ ; r g v . eturns an ro!ll8t;:1:Iil~·eturns
~n(!-1·ot;!::;II$U[,lg.bo~;£il b o~;£il f L l · l : ) : ~ f ! ,(l(ll;;t~ .~il'ild i.llIi1,.:n:I::;I2;i.-
i : r . ~ f e r r - J ~oods
:1
U-dn.l!p~d?'
[s
Spnaaq;!.r.l;g
o u tp tp ut ut ;
~,ood :!.._
shor shortt-
tams
an ~r~f ~r~f~r ~ri0 i0!' !'
5 ttJJ llpp e. e. t:t: io io ;
W.'~:I;Vth
ilut8!l !l '5xed '5xed costs o.ve;J Spll'€miirJg ilut8
~~'!,pil;1rIr~r
.~od. D-
e:~]a.~HS
,j;II. I.IP IP/$ /$ I~O@~ ,j;I
QII.ltpULl;,
good$
Un;I IOO[[~f-'l-e:r.r.te:l:t~$l·Y
JH
of the [ { t i n O W L T ~ g best
fo beef til! th
'stuOl.'lj;-·.I."llllll,
1'0 THE N'EXT
fj.r~ Whic.b (lor
f oI o I J6 J6 'i'i .~ .~ , i.i. u] u] ;§ ;§is : true
the
".l.fL~:I!l:e.J, lI.l3'!/eTJ.U~~
i.
liim!Ll!l}p6I,isli:?s,
! I " . I i e g 9 i ~ l '!/~ at; the CUJ,"rn[l:t l~w~(~
output? h.
Demand Foil' its
B. Demand
10['
:u
I L n H , iJiJ k l 5 , U C ;
its product pr
fbi[' it
D- MMgLIli..J MMgLIli..Jn.l n.l cost
product
IJ".If
r n e :r:r _ g € [ ' o f ' , e i ' 8 l 1 1 c y by
'~\¥O
firms
lee i_ll'ekr~t~c,
to peiee.
,~5'equal e qual
.... ,~-hbirgil1lall'e'! ,~-hbirgil1lall'e'!r"mlLl. r"mlLl. ~B
56
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al
1l! 1l!'1::1, '1: :1,YY 'j ncre ncreas as
eCOI eCOIrJ rJ{! {!I! I!IJ IJ
~1Iii-'
A. decr decrea easi sing ng aVel'ag-e ,ito,t~1cost thl',ough an ililt,r,OOtle iJ:~ eron eronom omie ies. s.uf uf scal scal lI3_
deC:l·e:asi~.I,g CQ$t.
~lI1id
i:no;;;l:,r,:i:no;;;l:,r,:-.I:iIsing .I:i Ising b'l~
t.Qi
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r ed ed u c
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(!g-I;Il~L,!i%'l$ ~~I:,i«
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'bll!' 'bll!'
diJ;)( diJ;)(:n; :n;!Mi !MiSS-
F ee ee J ~ ~ ~
d~'~
e :r:r np n p ~Q ~ Q y m eJ e J :~ :~ ~ Ek
b v d oo oo re re :::: ts ts -
teeI!lug€[S
e:trrl,p~oyn
rfeem~ by s J : I i£ t ~g ro~th~ pro~h.c~ the
e i D I 1 I p l o 'y'y m - € '''' [~ [~ ~
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Uii~;!i~J~!M.u.i
S L l !b !b : ffff l.l. [I[I iIiI ,
~QtiOOI1W~'6'1
eff\!:}ct onteenage
' ,n,n i l i t
C.!li;ul~
s u rp rp lu lu s
: i.i. u ltlt t't' ud ud u (l(l e 8
'i~f2 ' b h ; ; _ . ; ~ ~),piP'~i~, o r
IUle~.I:t?
i_lag -eoor&Cim~C prol1w I E : _ 'i ulI:.::I"oosil l'.I._g
If Co:liig)l'E!gS
a U ' 'I f ( ftft 1 r e r s Is ~:nnJLFrJ '\~"i~B'~,
cons consum umer er surp surplu lu
l }(}( !J !J :e :e a s irir l:l: I;I; )" )" o u s um um e r
~a..oor !iTJ2!J:'k-et{iiI {iiI WI {'OJ:
€il "w~'lr lrer er.s .s TheThe'[._oo[j~e "w~'
S'
il,
' w i U \yaJ:if~ 00
~'!Af(I'l'k
t ha ha r ' ,a ,a t i~le l1 l1 l.l. (p (p 'J 'J DY DY -:-: -D -D IJ IJ ei ei l will decrease
T e eu eu aagg e
(!J)I;IIlf.'l~:f,eV1f(;:i1r w~![I.Elb~ra
'wiU '~m':;ml~;
be"1{Q([.k_
~I ~;V~U : U ~ : ! ] nt l e V i _
te-e]:l
oI3m,plQy!!ne!Jl.t ~'i!in 'W'iLll'it to at Ul~~nflnl :llilIj ~~.'l-
~~J.I,Ub~
il3IIlli,pkf,'ilIU'W!!ll'~
1ee1!J::J._g€
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fh:,[l'IIS
,"",m
p~o/
t h - e mark0~-cl€i! mark0~-cl€i! ring ~owel'hal~ ti a nd nd , 1 + 1 ' bec.::1:l~6€'
lkre
f:t:'!AreL'
tlilir,l; ~u"m-e
"!:age
i;!j,
'11,],
r~sl'1llargllfl:Elill',e'';!em'-l£: ,Pl',Odtlii:t clJ.all'lge
~nincome that
i~Dldii;' i~Dldii;'j,(h.lal j ,(h.lal works
B.
&Ut1iige
as f ~ 1 i \
is
''i4~enl ,an
{liCCIJ.U'.s
,ru.:!lJ.litk.1!fJiI,l
hooits
A . . - r J l.'ru£h.]sl1')1' iM produce U : L O r e ~i(:~ef,~~~ ' i f I : ; . 1 ~ .f . J ; r I ! l 1 t r J ~ ' t '~[JdJ~1;"' \ ' ! ( , h 9 , c h of
pr{! pr{!!( !(hu hu"' "':' :'~~ ~~OH OHOI OI[' ['cone c oneum umpt ptjc jc of 8, good good gene genera raee ee a. p o s itit iv iv e e x i[i[ ._ ._ e r J la la H ~ v
[r t o ta ta l
good gt.':T.uel',ates
g o o d , is pro-
prod prod!J !JIt~ It~~O ~OI~ I~
] :e :e v :e :e r ul ul !.!. le le L h a : o c c u r s '\'l,i"hif:.~ l Io~l;"~ {~ : !;!; 'I n r . , pu ~1.d_dH~orH;Ll.lIo~l;"~ pu ~ 1 $ OIiTJ,-'
'Or.l.l,;!
',["h ',["h
r'~G!S'ed tGt,l t.t::\I'e:~.I,lLB {HYi,~.ed, b~ ~h t],l1!a.rutit,\1 'E
cl:liI-uige i~ otaJ
000.1[.
1..!J1lI ~'ddJ.t;:i.Q:I!li~~
f 1 ; 8 ! AI1 h~(%e21 h~(%e21SB' SB' illl t h
..
decrease
til.
i s ' !"!" ! < r .l.l t!t! lplp ! o ~ Y i S d
m , a; a; rg rg fifi ] i i3 i3 i isocial be.nefit iI11
[p'!!J
result h~
"?
OOI1J-
'~ne
bllc produeelon
g:rJo-J
.B
;[L[.i.
LI1iCreaW the i!lp i!lptJ tJma ma quan quanti tity ty
of tne
,good C.
.L
decrease
iIi!
the o.ptima!
(jlllillJI'it:U':~' of
the
,@;,ooJ II ~]w ~ e {! '''lith [llw(],lI! [llw(],lI!c.::i c.::iog og 't~e 't~e good
..ssod~ed
in the 6od~ 1.:(I~t.fj, , ~ l : ~ o o t ' \ i : ~ l _ j . t e d , ~3- ' 3 J . d~8G~ w r U l cons consur urai aing ng th good
© 2a U 5
CbmlPi!ed
LI
,01' ,01' OOIIl OOIIlf!l.l f!l.lIl Ilf.l f.lpi pi.i .i(i (i(j (j". ".1. 1.
IlBgawtive ,~te:rt~aUt.Y_ :-,l
:rnQ'LIli~lIl?O~:-':
pJ:odt~~
:;1
oo
~Qi;l
p;~~'l;)lk
r,[,:h~;l:il1idu~"Lry : il1idu~"Lry i):I."i;,"!dt!.QE!~gL p1"i",tL
th at occu occurs rs -~")l,'herl,one
~ 1 I 1 l . L 1 l I:I: p ~ ~ " '
$iJ]miJ:uf'!;'a JlifilM~cgood should
Ll1Io!; Ll1Io!;lu lu~,~r ~,~r,',' i:
·.nl' L i 1 I . u , i I ; ] $ k . . . .
I~tbo, ¢rniPl'o~d ¢rniPl'o~d l8_
f:{~Uow:tl1l~
,co[!d.1l~;hl:t06
dueed cnJ..fLriS;e
Ulr;':
e:r~
in total oover~IlJ:e~ha;t oceu oceurs rs whf! whf!rt rt
o n e ~ i lldd , [d [d i {{rr ( n; n; 1 tltl l Ul.L"'~'~ of th C.
OOcl..il'tl!Z;1
('!i
~d
Item Item No., No.,
Correct Ar~swer ,t.\
2,
f\ ,A
Item No.
in
C - l t i ~ T , e l j _ · : t {\,~].swe:i'
D.
,:12
,3~ ,ijEj,
.[j.
,1'\
'6
3'
'il'
f'
J\,
lI
;3'9
10
411]
.1
,4
p!;.
1:2'
-4,2
p!;.
1....
4,
,J:\.
is
,jJI
H1
,A
"'~!5
:7
11
48 1.'9
::ro 2:1:
'E
~~
::22'
.D
1'3
iJ4
'2'4
55
:z.J
2n·c 2:
2'
E;
.c
5"
,A ,A
.5 'lJD
ON 1'0
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