ECON1012/1013 Chapters 8, 9 and a FULL Summary of Market Models
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Course
Economics 1A (ECON1012)
Institution
University Of The Witwatersrand (wits)
Book
Economics Global & Southern African Perspective
Detailed and in-depth notes of Chapters 8 and 9 AND a complete overview comparing the four market models (Perfect Competition, Monopolistic Competition, Monopoly and Oligopoly), covering the content for ECON1012/1013 (Microeconomics). These colourful summaries contain all the important information ...
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original textbook for the material on which these summaries are based. All images are taken directly from:
Parkin, M. et al. (2020) Economics: Global and Southern African perspectives. 3rd edn. Cape Town, Western Cape: Pearson South Africa.
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, PART 3 :
CHAPTER & Unin and bemand
108
DIFFERENT POINTS ALONG
BUDGET CONSTRAINT ARE
CONSUMPTION POSSIBILITIES
8
6
&
⑳
AFFORDABLE
·
ALL THINGS YOU CAN AFFORD TO BUY AFFORDABLE UNAFFORDABLE
4 ⑧
· ON LINE = USING ALL
LIMITED BY INCOME + PRICES ONE MUST PAY 2 ⑧ INCOME
BUDGET LINE
·
CONSUMER'S BUDGET LINE ⑧
0 ,2 3 4 3
-
LIMIT TO CONSUMPTION POSSIBILITIES movies (PER MONTH
-MARKS BOUNDARY BETWEEN COMBINATION Of GOODS + SERVICES HOUSEHOLD CAN AFFORD TO BUY THOSE IT CAN'T
-
CONSUMPTION POSSIBILITIES LIMITED BY INCOME
CONSUMER'S
-
BUDGET LINE CONSTRAINS CHOICES : MARKS BOUNDARY BETWEEN WHAT IS AFFORDABLE +
WHAT IS UNAFFORDABLE
·
CHANGES IN CONSUMPTION POSSIBILITIES
-
W WHEN INCOME/PRICES &
-
RISE IN INCOME SHIFTS BUDGET LINE OUTWARD BUT LEAVES SLOPE UNCHANGED
-
BUDGET LINE SHOWS WHAT IS POSSIBLE +PREFERENCES DETERMINE CHOICE CONSUMER MAKES
PREFERENCES
·
DESCRIPTION Of LIKES + DISLIKES
·
DESCRIBE PREFERENCES IN CONCEPT Of MARGINAL BENEFIT MARGINAL BENEFIT CURUE
·
MBC IS ALSO DEMAND CURVE
·
.. GOAL OF THEORY Of CONSUMER CHOICE IS TO DERIVE DEMAND CURVE FROM DEEPER ACCOUNT Of How
CONSUMERS MAKE TUEIR BUYING PLANS : EXPLAIN WHAT DETERMINES DEMAND +MB
·
ACHIEVE THIS GOAL VIA DEEPER WAY OF DESCRIBING PREFERENCES
1 APPROACH USES IDEA Of UTILITY
·
UTILITY =
BENEFIT/SATISFACTION PERSON GETS FROM CONSUMPTION Of GOODS + SERVICES
· TOTAL BENEFIT PERSON GETS FROM CONSUMPTION Of All DIff GOODS
TOTAL UTILITY + SERVICES
-
DEPENDS ON LEVEL Of CONSUMPTION
-
MORE CONSUMPTION GENERALLY GIVES MORE UTILITY
· CHANGE IN TOTAL UTILITY THAT RESULTS FROM A ONE-UNIT INCREASE IN QUANTITY Of GOOD CONSUMED
MARGINAL UTILITY
QUANTITY OF GOOD CONSUMED &
-
MU IS POSITIVE BUT DIMINISHES AS
-
POSITIVE MU
ALL THINGS PEOPLE ENJOY +WANT MORE Of
·
·
Tu AS QUANTITY CONSUMED
POLLUTED AIR
·
SOME THINGS +ACTIVITIES :
NEGATIVE MU :. LOWER TO EC .
-
DIMINISHING Mr
↓ AS CONSUMPTION
·
TENDENCY FOR MU TO Of GOOD =
PRINCIPLE Of DIMINISHING Mr
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