Chp.18

Chapter 18 is about capital, the economy's stock of equipment and structures supply and demand for land, labor, and capital determine the prices paid to workers, landowners, and capital owners. It talks about factors of production: the inputs used to produce goods and services (labor, land, and capital are the most important. In addition, the derived demand is a firm's demand for a factor of production is derived from its decision to supply a good in another market. Most labor services are inputs into the production of other goods. In competitive profit maximizing firm we assume (1)it's competitive for supply and demand (only decides how much to produce and how may workers to hire), (2)it's profit maximizing so the firm doesn't directly care about the number of workers it has or the number of the item it produces (only cares about profit). The production function: the relationship between the quantity of inputs used to make a good and the quantity of output of that good. The marginal product of labor is the increase in the amount of output from an additional unit of labor change in quantity / change in labor. The diminishing marginal product is also the property whereby the marginal product of an input declines as the quantity of input increases illustrates why the production function gets flatter as the quantity of input rises. The value of the marginal product is the marginal product of an input times the price of the output, price x MPL = VMPL, depends on the number of workers.

Chp. 17

Chapter 17 is mainly about oligopolies which are market structures in which only a few sellers offer similar or identical products. It consists of game theory, the study of how people behave in strategic situations. A duopoly is oligopoly with only two members, a collusion is an agreement among firms in a market about quantities to produce or prices to charge, cartel is a group of firms acting in unison (must agree on level of production and amount produced by each seller) would act as a monopoly, but this is often unrealistic because of dividing profit evenly and antitrust laws that prohibit explicit agreements among oligopolists both firms would want to produce based on self interest and then they would over produce.The Nash equilibrium is a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen illustrates tension between cooperation and self-interest. When firms in an oligopoly individually choose production to maximize profit, they produce a quantity of output greater than the level produced by monopoly and less than the level produced by competition. The oligopoly price is less than the monopoly price but greater than the competitive price (which equals zero) the output effect: because price is above MC, selling one more gallon of water at the going price will raise profit the price effect is raising production will increase the total amount sold, which will lower the price of water and lower the profit on all the gallons sold (if its smaller than output, then production will increase but if its larger than output, then they will not raise production). As oligopolies produce more they get closer to being like a competitive market (P gets closer to MC and Q produced gets closer to socially efficient level). The dominant strategy is the strategy that is best for a player regardless of the strategies chosen by the other player self interest leads to a negative outcome in the prisoner's dilemma.

Chp. 16

In Chapter 16, Monopolistic Competition is the main topic. The chapter brings up Oligopoly which is a market structure in which only a few sellers offer similar or identical products. A Monopolistic competition is a market structure in which many firms sell products that are similar but not identical (characterized by many firms, differentiated products, and free entry. The equilibrium in a monopolistically comptetive market has excess capacity (operates on the downward-sloping portion of ATC) and each charges a price above marginal cost. In monopolistic competition, there is a standard deadweight loss (because of the mark up of price over marginal cost) and also the number of firms in the market can easily be two large or too small. Invisible hand does not ensure that the total surplus is maximized under monopolistic competition. Product-variety externality: because consumers get some consumer surplus from the introduction of a new product, entry of a new firm conveys a positive externality on consumers. Business-stealing externality: because other firms lose customers and profits from the entry of a new competitor, entry of a new firm imposes a negative externality on existing firms. Depending on whether a positive or negative externality is larger, a monopolistically competitive market could have either too few or too many products. And Advertising is a debated subject because some believe they are manipulative to one’s taste but others argue that it is used as a way to provide information to possible customers.

Chp. 15

Chapter 15 is about Monopolies. Within the market for a monopoly are barriers of entry Monopoly resources: a key resource required for production is owned by a single firm (ex. Companies supplying water), Government regulation: the government gives a single firm the exclusive right to produce some good or service (ex. Copyright), and Production process: a single firm can produce output at a lower cost than can a larger number of producers. Natural monopolies: a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. Monopolies are Less concerned with other firms trying to enter the market and People that would enter the market would know that they cannot benefit from the same things that monopolists benefit from because they couldn’t achieve the same low costs and ATC curve continually declines. The trend of a monopolist’s demand curve is downward sloping curve because the monopoly has to accept a lower price if it wants to sell more output. The Monopolist’s marginal revenue is always less than the price of its good because of its downward sloping curve Output effect: more output is sold, so Q is higher, which tends to increase total revenue. The price effect: the price falls, so P is lower, which tends to decrease total revenue and Because the price on all unites sold must fall if the monopoly increases production, marginal revenue is always less than the price.

Chp. 14

Chapter 14 brings up competitive market again which are markets with many buyers and sellers trading identical products so that each buyer and seller is a price taker firms can freely enter or exit the market. Terms also discussed again are average revenue: total revenue / quantity sold (= the price of the good), marginal revenue: the change in total revenue from an addition unit sold , firms want marginal revenue to exceed marginal cost, and therefore it would increase the quantity produced to raise profit. The price of a firm's output is the same regardless of the quantity that the firm decides to produce  and trends are: if marginal revenue is less than marginal cost the firm can increase profit by reducing production, if the marginal revenue is greater than marginal cost, the firm should increase its output, if the marginal cost is greater than the marginal revenue the firm should decrease its output at the profit maximization level of output, marginal revenue and marginal cost are exactly equal shutdown is short-run decision not to produce anything during a specific period of time because of current market conditions and exit is long run decision to leave the market. firm that shuts down has to pay fixed costs, but exit does not have to pay for anything. shutdown if TR

Chp.13

Chapter 13 is about the production aspect and brings up the terms total revenue which is the amount a firm receives for the sale of its output. Also, total cost which is the market value of the inputs a firm uses in production, profit is total revenue minus total cost, production costs is input costs that require an outlay of money by the firm, implicit costs is input costs that do not require an outlay of money by the firm, economic profit is total revenue minus total cost, including both explicit and implicit costs. Accounting profit is total revenue minus total explicit cost and production function is the relationship between quantity of inputs used to make a good and the quantity of output of that good.

Chp. 11

Chapter 11 is mainly about the types of goods there are in a market. For example, a good can be public, private, common resource, or natural monopoly. If the good is public then it is not excludable, does not require payment, and is not rival in competition, one person's use of the good diminish the opportunity for others. Private goods are excludable and rival in competition, common resource goods are not excludable and rival in competition, and natural monopolies are excludable and not rival in competition. A public good is always associated with positive externalities that will be subsidized while common resources are associated with negative externalities and become regulated by the government. In the private market, people known as free riders, people who receive the full benefit of something while avoiding payment, cause externalities for companies and in response private companies produce less to give free riders less of an incentive to free ride.

Chp. 10:

Externality: the uncompensated impact of one person’s actions on the well-being of a bystander,If it’s adverse then the negative externality,If it’s beneficial the positive externality, and a Market is not efficient when there are externalities because buyers and sellers neglect the effects of their actions. For example, exhaust from cars is a negative eternality, restored historic buildings is a positive externality, dogs barking is a negative externality, and research into new technology is a positive externality. For externalities and market inefficiency, the Demand curve represents the value of the good to the consumers and how willing they are to buy that good while the Supply curve represents the cost of the good to the producers and how willing they are to produce that good at a given price. In addition, Negative externalities Cost to society is larger than the cost to producers, Social-cost: private costs of producers plus the costs of others indirectly affected, Difference between supply and social cost curve is a cost of the negative externality.

Chp. 8: Application: The Costs of Taxation

Chapter 8 is about the effects of taxation in the market. The chapter explains that when a ax is levied on buyers, it causes the demand curve to shift downwards by the size of the tax while if the tax was levied on the sellers, the supply curve shifts upwards by the size of the tax. The end result is that the price paid by buyers increases and the price received by sellers are decreased. In addition, a tax on a good causes the size of the market for the good to decrease. Consumers, producers, and the government receive some type of benefit from taxation; consumers receive consumer surplus, producers receive producer surplus, and the government receives total tax revenue. Welfare without tax would leave the equilibrium at the intersection between the supply and demand curve.

Chp. 7: Consumer, Producer, and Efficiency of Market

Chapter seven is about a buyer's willingness to pay for a good. This means the maximum amount the buyer will pay for the good. It brings up the term welfare economics which is how the allocation of resources affect economic well-being. The chapter also discussed consumer which is the amount of money they are willing to pay minus the amount of money they actually paid. The consumer surplus shows the benefits that a consumer receives after participating in a market. When measuring the consumer surplus it is good to know that it is similar to the demand curve and the vertical drops in the line represent a buyer’s willingness to pay. The area below the demand curve and above the price is the consumer surplus. Since  in a consumer’s surplus, the highest willingness to pay has the largest amount of surplus, however, the producer’s surplus is greater when the producers have the lower cost.

Chapter 6: Supply, Demand, and Government Policies

Chapter six seems interesting but difficult as well. The beginning of the chapter talks about control and prices and explains the terms price ceiling and price floor. One being the legal maximum a firm can charge for a good or service and the other being the legal minimum a firm can charge for a good or service in that order. Moreover, the chapter discusses how another type of price control, rent control, can lead to the dwindling of a real estate owner's rent cost. Once the price ceiling is under the owner's expectation, he or she may care less about the property. It also focuses on trends, for example, if the equilibrium price is above the price floor, then the price flooring is not binding. However, if the equilibrium price is below the price floor, then the price flooring is binding. Following, it states how evaluating price controls is aimed to help the poor but does more damage than actually benefiting them. Markets are good ways to organize economic activity. But, economist dislike the establishment of ceiling and floor prices.

Crisis Actors

This article discussed the subjects of conspiracies in the government and the truths of war. He makes the reader actually question these topics. While reading, I didn't understand why the author of the article had images and captions, but I soon realized it was used as evidence and examples to analogize situations that occur today. The author talked about Crisis actors, whose job is to act out and spread fear into the citizens and public during a period of time where they do not abide by the government's regulations. This article focused on how people can be manipulated and deceived by others in a higher authority and not notice their actual intentions. He also talks about how the purpose of public speaking isn't to inform but to convince people. It makes me think twice about what I hear on TV, Radio, or Social Media. I paid close attention to the image of Kennedy rioters. They protested because they wanted to know who assassinated the Kennedys but one guy stated that the protesters themselves were the murderers for complaining and pushing him to pass the Equal Rights Act.

Chapter 5: Elasticity and its Application

Chapter 5 is mainly about how economist find the precise measurements of how buyers and sellers react to a change in market conditions, also known as elasticity. For example, price elasticity of demand measures how the quantity demanded responds to a significant change in market prices, and some factors can determine the level of price elasticity of demand: availability of close substitutes, necessities versus luxuries, definition of the market, and time horizon. It is referred to as inelastic when the quantity demand reacts slightly to the change in price. One method to find the price elasticity of demand is by dividing the percentage change in quantity demanded by percentage change in price.

Chapter4: The Market Forces of Supply and Demand(250)

Chapter 4 is focuses on the forces of supply and demand in a market. A market is a group of people who participate in the purchasing of a specific good or service. There are multiple types of markets: monopolistic competitive, perfectly competitive, competitive, and monopoly. Each market is distinguished by its competitiveness and if buyers and sellers have market power. In addition, a trend that follows supply and demand is the Law of Demand; when the price of a good or service increases, the quantity of demand decreases. And when the price of the good or service decreases, the quantity of demand is greater. Methods of depicting the Law of Demand are these demand schedule and demand curve. The demand schedule shows the relationship between the price of a good and the quantity demanded in a table and the demand curve shows the relationship between the price of a good and the quantity demanded in a graph. The demand curve shifts when there is an increase of decrease in quantity of demand. The curve shifts right when the demand increases and shifts left when the demand decreases. Other factors that contribute to shifts are income, price of related goods, tastes, expectations, and the number of buyers.