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1 Microeconomics 1

EC 111(H)

.

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()

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()

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()

5.......................................................................................... 159

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1 (Introduction to Economics)

1.

2

1.1

( L e o n e l C . R o b b i n s ) ( R o b b i n , 1 9 4 9 , p . 1 6 )

(Economics is the study of the use s c a r c e r e s o u r c e s t o s a t i s f y h u m a n w a n t s )

. ( P a u l A . S a m u e l s o n ) ( S a m u e l s o n , 1 9 8 5 , p . 4 S a m u e l s o n , 1 9 9 5 )

EC 111 1

1.2

(A l f r ed Ma r sha l l ) ( M a r s h a l l , 1 9 6 2 , p . 1 )

(Economics is the study of mankind in the ordinary business of l i fe)

( A . C . P i g o u e )

2 2 2

EC 111 2

. ( R e s o u r c e )

-

-

-

(Factors of Production)

-

-

-

- . (Goods and Services)

(Tangible) (Intangible)

EC 111 3

2

- (Free Goods and Services)

- (Economic Goods and Services)

. . . (Scarcity)

. (Choice) (Cost) (Cost)

. (Opportunity Cost) ( O p p o r t u n i t y C o s t ) ( O p p o r t u n i t y C o s t )

EC 111 4

2.

2

2.1 ( M i c r o e c o n o m i c s )

2.2 ( M a c r o e c o n o m i c s )

2 . .

EC 111 5

3. (Economic Theory)

2

3.1 ( D e d u c t i v e M e t h o d )

(Hypothesis)

3.2 ( I n d u c t i v e M e t h o d )

4.

2

4.1 (Economic Analysis P o s i t i v e E c o n o m i c s )

EC 111 6

4.2 (Economics Policy Normative E c o n o m i c )

(Value Judgement)

5.

2 2

(Economic Resources)

5.1 . (What is Produced)

. (How to Produce) (Efficiency)

. (For Whom)

5.2

EC 111 7

. (How much Unemployment and I n f l a t i o n E x i s t )

. (Is Production Capacity Growth) ( P r o d u c t i o n P o s s i b i l i t y C u r v e : P P C )

6. (The Functions of an Economic System)

7.

7.1 ( O w n e r s h i p )

7.2 ( F r e e d o m o f C h o i c e ) 7.3 ( F r e e d o m o f E n t e r p r i s e ) 7.4 (Mechan ism)

8.

8.1 ( T r a d i t i o n a l E c o n o m y ) 8.2 (Command Economy of

C e n t r a l l y P l a n n e d E c o n o m y ) ( S o c i a l i s m )

EC 111 8

8.3 (Market Economy) (Capitalism) 8.4 ( M i x e d S y s t e m s )

8.1

Trad i t i on F e u d a l

8.2

1990

8.3

8.4

Pure Type (Basic Principle)

EC 111 9

9.

(Economic Unit) 2

9.1 ( H o u s e h o l d ) (Consumer)

( F a c t o r O w n e r s )

9.2 ( B u s i n e s s F i r m s )

1.1

EC 111 10

1.1

EC 111 11

EC 111 12

1

1

1. (1) (2) (3) (4) (5)

2. (1) (2) (3) (4) (5)

3. (1) (2) (3) (4) (5)

EC 111 13

4. (1) (2) (3) (4) (5)

5. (1) (2) (3) (4) (5)

6. (1) (2) (3) (4) (5)

7. (1) (2) (3) (4) (5)

8.

(1) (2) (3) (4) (5)

EC 111 14

9. (1) (2) (3) (4) (5) 10. (1) (2) (3) (4) (5) 11. (1) (2) (3) (4) (5) 12. (1) (2)

(3) (4)

(5)

2

1. 2 2 2

2.

-

EC 111 15

-

-

-

-

- 3.

4. (Deductive Method) (Inductive Method)

5. (Economic Analysis) Positive Economics) (Economic Policy Normative Economics)

6.

7.

EC 111 16

EC 111 17

2

(Demand Supply and Market Equilibrium)

1. (Demand)

(Purchasing P o w e r ) ( W i l l i n g t o P u r c h a s e )

2.

(QX)

- (PX) - (Y) - (PY) - (T) - (A) - (POP) - (INC)

EC 111 17

3.

QX = f (PX , Y , PY , T , . . .)

3

3.1 3.2

3.3

3.1 ( P r i c e D e m a n d D e m a n d )

QX = f (PX)

Q X = X

EC 111 18

P X = X

3.2 ( I n c o m e D e m a n d )

QX = f (Y)

Q X = X

Y =

. (Normal Goods)

. (Inferior Goods)

3.3 (Cross Demand)

EC 111 19

QX = f (PY)

QX = X

PY = Y

2

. 2 (Complementary Goods)

. 2 (Competitive Goods Substitution Goods)

3

4. (Law of Demand)

EC 111 20

5. (Demand Schedule)

2.1 Carrot

/..

( : ..) A B C D E

20 40 60 80

100

50 40 30 20 10

2.1 Carrot Carrot

6. (Demand Curve)

Carrot plot

Carrot Carrot Carrot Carrot Carrot

EC 111 21

(Law of Demand) plot (Negative Slope)

D

C

B

A

Carrot

D

100

Carrot E

10 20 30 40 50

80

60

40

20

2.1

7. (Individual Demand and Market Demand)

7.1 (Individual Demand)

EC 111 22

7.2 (Market Demand)

2 ,

2.2 Carrot

Carrot

/..

20 40 60 80 100

50 40 30 20 10

60 50 40 30 20

50+60 = 110 40+50 = 90 30+40 = 70 20+30 = 50 10+20 = 30

2.2 2.2

EC 111 23

10 20 30 40 50 60 70 80 90 100 110

100 80

60

40

20

Carrot

D D D Carrot

2.2 Carrot

8. (Change in Quantity Demanded and Change in Demand)

2

8.1 (Change i n Quan t i t y Demanded )

( ) (Move a long the Curve ) 2.3

EC 111 24

40

60

80

C

D

D

B

20 30 40

2.3 Carrot

2.3 D Carrot

Carrot 60 Carrot 30 ( C) Carrot 40 Carrot 40 ( B) Carrot Carrot C B

Carrot 60 80 Carrot 20 ( D) Carrot Carrot C D

8.2 (Change in Demand)

EC 111 25

A B

D

D2

A C

P0 P0

D1 D

0 Q0 Q1 0 Q2 Q0

(a) (b)

2.4

EC 111 26

2.3

2.3

: (PX) /..

(QX)*1 (QX)*2

20 40 60 80 100

50 40 30 20 10

80 70 60 50 40

*1 30,000

*2 36,000

100

80

60

40

20

Carrot

DD2(Y=30,000)

1(Y=36,000)

10 20 30 40 50 60 70 80 Carrot

2.5

EC 111 27

2.3 2.5 C a r r o t

1. 2. 3. 4. 5. 6.

9. (Supply)

10.

(QX) (PX) ( C ) ( W ) ( P Y ) ( T )

EC 111 28

11.

QX = f (PX , C , W , PY , T , . . .)

12. (Law of Supply)

13. (Supply Schedule)

EC 111 29

2.4 Carrot

/.. ( : ..)

F G H I J

20 40 60 80 100

10 20 30 40 50

2.4 Carrot Carrot

14. (Supply Curve)

plot (Positive Slope)

EC 111 30

100

80

60

40

20

F

H

G

I

S J

10 20 30 40 50

2.6

15. (Individual Supply and Market Supply)

15.1 (Individual Supply)

15.2 (Market Supply)

EC 111 31

2 A B

2.5 Carrot

/.. A B

20 40 60 80 100

10 20 30 40 50

5 10 15 20 25

10+5 = 15 20+10 = 30 30+15 = 45 40+20 = 60 50+25 = 75

2.5

20

40

60

80

100 S

SA

SB

10 20 30 40 50 60 70 80

2.7 Carrot

EC 111 32

16. (Change in Quantity Supplied and Change in Supply)

2

16.1 (Change in Quant i ty Suppl ied)

( ) (Move along the Curve) 2.8

S

G

H

I 80

60

40

P

Q 20 30 40

2.8 Carrot

2.8 S Carrot

Carrot 60 Carrot 30 ( H) Carrot 40 Carrot 20 ( G) Carrot Carrot H G

EC 111 33

Carrot 60 80 Carrot 30 40 H I

16.2 (Change in Supply)

2.9

P S

S1

0 Q Q 0

S

S2

P0

P

P0

Q0 Q1 Q2 Q0

(a) (b)

2.9

EC 111 34

2.6

20 40 60 80 100

10 20 30 40 50

20 30 40 50 60

S S1

80

60

40

20

100

10 20 30 40 50 60

2.10

EC 111 35

Carrot Carrot

17. (Market Equilibrium)

2.11 E OPE O Q E

O P 1 ( D < S ) (Excess Supply) AB Q 1 Q 2

O P 2 (D>S) (Excess Demand ) CD Q 3 Q 4

EC 111 36

D

QE

A

C

B

S

D

P1

PE

P2

0 Q3 Q1 QE Q2 Q4 Q

2.11

2.7

/..

Carrot

Carrot 20 40 60 80 100

50 40 30 20 10

10 20 30 40 50

2.11 2.7 OPE 60 OQE 30

EC 111 37

18. (The Effect on Equilibrium Price and Quantity)

/

1

- D S (P) (Q)

- D S (P) (Q) 2

- S D (P) (Q) - S D (P) (Q) 3

- D S (P) (Q)

- D S (P) (Q)

- D S (P) (Q)

- D S (P) (Q)

3 3

EC 111 38

D S P Q D

D P Q

S P Q

D S P P P

D Q S Q Q

19.

2

19.1 (Minimum Control)

() (Price Guarantee or Price Support)

EC 111 39

A B S

D

P1

P0

0 Q1 Q0 Q2

2.12

2.12 OP0 OQ0 OP0 OP1 OP1 OQ1 OQ2 (Excess Supply) = Q1Q2 OP1

EC 111 40

() = OP1 Q1Q2 = .. Q1ABQ2

() = OQ2 OP2 OP1 OP2 P1P2 P1P2

= .. P B C P ( 21.3) 1 2

A

C

D

B

P1

P0

P2

0 Q0 Q0 Q2

2.13

2

EC 111 41

19.2 (Maximum Price Control)

(Price Control Policy)

S

D

P2

P0

P1

Q2 Q0 Q1

2.14

2.14 OP0 OP1 OQ1 OQ2 (Excess Demand) = O1Q2 = Q1Q2

EC 111 42

()

() () (Black Market)

O P 2

() (Rationing Policy)

() (Import) Supply

EC 111 43

EC 111 44

2

1

1. (1) (2) (3) (4) (5)

2. (1) (2)

(3) (4)

(5)

3. (1) (2) (3) (4) (5)

EC 111 45

4. A B

10

8

7

100

A

B

(1) A = 120 , B = 150 (2) A = 80 , B = 100 (3) A = 80 , B = 60 (4) A = 100 , B = 100 (5)

5.

(1) (2) (3) (4) (5)

6. X Y X Y

(1) (2)

(3) (4)

(5)

EC 111 46

7. X Y X Y

(1) (2)

(3) (4)

(5)

8. (Normal Goods) (1) (2)

(3) (4)

(5)

9. (Inferior Goods) (1) (2)

(3)

(4) (5)

10.

(1) (2)

(3)

(4) (5)

11. (1)

(2)

(3) (4)

(5)

EC 111 47

12. X

(1) X (2) Y

(3) (4)

(5)

13. X X

(1) (2) (3) (4) (5)

14. X (1) (2)

(3) (4)

(5)

15. (1) (2)

(3) = (4)

(5)

16. (1) (2)

(3) (4)

(5)

EC 111 48

17. (1) = (2) = (3) = (4) (5)

18. (1) (2)

(3) (4)

(5)

19. (1) (2) (3) (4) (5)

20. (1) (2) (3) (4) (5)

EC 111 49

21. (1) (2)

(3) (4)

(5)

22. 20 20

(1) , (2) ,

(3) , (4) ,

(5)

2

1. 2. 3. 4.

5. 6.

7.

8.

EC 111 50

9.

10.

EC 111 51

EC 111 52

3

(Demand and Supply Elasticity) 2

(Elasticity)

1.

(Elasticity of Demand)

QX = f (PX , Y , PY , . . .)

QY = f (PX)

QX = f (Y)

QX = f (PY)

EC 111 53

3

1. (Price Elasticity of Demand) 2. (Income Elasticity of Demand) 3. (Cross Elasticity of Demand)

1.1 (Price Elasticity of Demand)

1% %

Ed =

1.2 (Income Elasticity of Demand)

1% %

EY =

EC 111 54

1.3 (Cross Elasticity of Demand)

1% %

Exy =

2.

Ed = %

%

Q1

P1

Q2

P2

% = 100Q

QQ

1

12 100QQ

% = 100P

PP

1

12 100PP

EC 111 55

Ed =

100PP

100QQ

= P

PQQ

Ed = QP

PQ

Point Elasticity of Demand

(Arc Elasticity of Demand)

% = 1002

QQQ

100

2QQQQ

121212 +

=+

% = 100

2PP

P100

2PPPP

121212 +

=+

Ed = P

PPQQ

Q

100

2PP

P

100

2QQ

Q

12

1212

12

++

=+

+

Ed = 12

12

QQPP

PQ

++

Ed = 21

21

QQPP

PQ

++

Arc Elasticity of Demand

EC 111 56

Point Elasticity of Demand (Ed)

Ed = QP

PQ

P =

Q =

P = Q =

Arc Elasticity of Demand (Arc. Ed)

Arc . Ed = 21

21

QQPP

PQ

++

P1 Q1 =

P2 Q2 =

Point Income Elasticity of Demand (EY)

Ey = QY

YQ

Y =

EC 111 57

Q =

Y = Q =

Arc Income Elasticity of Demand (Arc. EY)

Arc . Ey = 21

21

QQYY

YQ

++

Y1 , Q1 =

Y2 , Q2 =

Point Elasticity of Cross Demand (Exy)

EXY = X

Y

Y

X

QP

PQ

PY = Y

QX = X Y

PY = Y QX = X

Arc Elasticity of Cross Demand (Arc Exy)

EXY = 21

21

XX

YY

Y

X

QQ

PP

PQ

++

EC 111 58

1xQ = X Y

2xQ = X Y

1YP = Y

2YP = Y

10 100 8 140

Point Elasticity of Demand

Ed = QP

PQ

P = 10 Q = 100

P = 8 10 = -2 Q = 140 100 = 40

Ed = 10010

240

= 2

Arc Elasticity of Demand

Ed = 21

21

QQPP

PQ

++

EC 111 59

P1 = 10 Q1 = 100

P2 = 8 Q2 = 140

P = 8 10 = -2 Q = 140 100 = 40 Ed =

140100810

240

++

= 24018

240

= 1.5

Ed

Ed = -.2 Ed = .2

Ed = -5 Ed = 5

3.

5

3.1 3.2 3.3 3.4 3.5

EC 111 60

3.1 Ed = 0 (Perfectly Inelasticity) 1% Ed = 0

3.2 0 < Ed < 1 1 (Inelasticity) 1% 1%

3.3 Ed = 1 (Unitary Elasticity) 1% 1%

3.4 1 < Ed < 1 (Elasticity) 1% 1%

3.5 Ed = (Perfectly Elasticity) 1%

4. ()

P

C

A

E

Q 0 D B

- AB

EC 111 61

C

Ed = DOBD =

EAOE =

CABC

E F

C A

F E P

0 D

E = PAOP

F = PCOP

E F ( PA PC)

EC 111 62

C = 1510 =

32

B 15 25 0

10 E C

F A 25

H

C

A

0 D B

EC 111 63

C (AB) () C

Ed C = CABC

DOBD

Ed = 1

Ed =

Ed1

A

AB

C AB

Ed C 1 Ed BC 1

Ed B 0

Ed AC 1

Ed A

EC 111 64

3

1.

2. Rectangular Hyperbola 1 (Unitary Elastic)

3. (Perfectly Elastic)

(Perfectly Inelasticity : Ed = 0)

P D

P1 P0

P2

0 Q Q

1%

EC 111 65

(Unitary Elastic : Ed = 1)

Rectangular Hyperbola

1% 1%

(Perfectly Elastic : Ed = )

P

P0

B D

Q1 Q0 Q

P

P0

P1 A

D

0 Q

EC 111 66

1%

OP0 OP0 OP0 OP0 OP0 ( )

5.

TR = P . Q

(Total Revenue : TR)

(Price : P)

(Quantity : Q)

5.1 1 (Ed>1)

- (P) (TR)

- (P) (TR)

1% 1% (TR) 1% 1% (TR)

EC 111 67

5.2 1 (Ed = 1)

- 1% 1% (TR)

- 1% 1% (TR)

5.3 1 (Ed < 1)

- (P) (TR)

- (P) (TR)

- 1% 1% (TR)

- 1% 1% (TR)

(Ed) (TR) (P)

Ed > 1 Ed = 1 Ed < 1

TR TR

TR TR

TR TR

P Ed

EC 111 68

6. (Determinant of Price Elasticity of Demand)

6.1

- Ed < 1

- Ed > 1

6.2

- Ed < 1

- Ed > 1

6.3

- Ed

- Ed > 1

Ed < 1

Ed > 1

6.4 Ed < 1

EC 111 69

Ed > 1

-

-

7.

EY = QY

YQ

Arc EY = 21

21

QQYY

YQ

++

EY (Normal Goods)

EY (Inferior Goods)

(EY > 1) (O < EY < 1)

(Normal Goods) EY (Positive)

(Inferior Goods) EY (Negative)

()

EC 111 70

-

- 1 (Luxury Goods)

EY

- EY EY

- EY EY

-

5,000 40 7,000 30 (Point Elasticity) (Arc Elasticity)

Y1 = 5,000 Q1 = 40

Y2 = 7,000 Q2 = 30

y = 2,000 Q = -10

EY = QY

yQ

EC 111 71

= 40

50002000

10 EY = -.625

1% .625%

-

EY = 21

21

QQYY

YQ

++

= 304070005000

200010

++

= 70

120002000

10 = .86

1% .86%

- (Inferior Goods)

8. (Cross Elasticity of Demand)

EXY = X

Y

Y

X

QP

PQ

EC 111 72

Arc EXY = 21

21

XX

YY

Y

X

QQ

PP

PQ

++

EXY X Y

EXY X Y

EXY = 0 X Y

- 2 (Substitution Goods) EXY (Positive)

2 X Y Y X

- 2 (Complementary Goods) EXY (Negative)

2 X Y Y x

EXY () 2 2 2 EXY = 0 2 2

18 20 1,000 800

EC 111 73

PY1 = 18 QX1 = 1000

PY2 = 20 QX2 = 800

EXY = 21

21

XX

YY

Y

X

QQ

PP

PQ

++

YP = 20 18 = 2 XQ = 800 1000 = -200

Exy = 80010002018

2200

++ =

180038

)100( = -2.11

1% 2.11%

9.

1. 2. 3.

4.

10. (Elasticity of Supply)

EC 111 74

Es =

ES Point Elasticity of Supply (ES)

ES = QP

PQ

P =

Q =

P = Q =

Arc. Elasticity of Supply (Arc . ES)

Arc ES = 21

21

QQPP

PQ

++

P1 Q1 =

P2 Q2 =

10 200 5 150

EC 111 75

P1 = 10 Q1 = 200

P2 = 5 Q2 = 150

P = 5 10 = -5 Q = 150 200 = -50 ES =

21

21

QQPP

PQ

++

=

150200510

550

++

= ( )350

)15(10 = .429

1% .429%

11.

5

11.1 11.2 11.3 11.4 11.5

11.1 ES = 0 (Perfectly Inelasticity) 1% ES = 0

EC 111 76

11.2 0 < ES < 1 1 (Inelasticity) 1% 1%

11.3 ES = 1 1 (Unitary Elasticity) 1% 1%

11.4 1 < ES < 1 (Elasticity) 1% 1%

11.5 ES = (Perfectly Elasticity) 1%

- (Perfectly Inelastic : ES = 0)

EC 111 77

S P

P1 P0

O Q0 Q

OP0 OP1 OQ0

- (Inelastic : ES < 1) ()

S

Q0 O

P0

P1

P

Q1 Q

1% 1%

- (Unitary Elastic : ES = 0) (Origin) 45

EC 111 78

1% 1%

- (Elastic : ES > 1) ()

Q Q0 O

P0

P1

P

Q1

S

S

Q0 O

P0

P1

P

Q1 Q

1% 1%

- (Perfectly Elastic : ES = ))

EC 111 79

S

P

O Q

P0

OP0 OP0 OP0 = 12.

12.1 Slope

2

- 1

- 1

- 2 (Origin) O 45 1

EC 111 80

- 1 (ES > 1)

()

C

P

D

B

A S

Q O

ES = ODCD

- 1 (ES < 1)

()

B O C

P

S

Q

A

D

EC 111 81

ES = ODBD

- 1 (ES = 1)

45 P

A

P S

S

A

O D Q O D Q

ES = ODOD

12.2

-

E , F G

EC 111 82

Q

E

O

F

P

G

E 1

F 1

G 1

13.

-

- ES

ES

14.

2

EC 111 83

1. (Specific Tax) 2. (Ad Valorem Tax) (Specific Tax)

(Ad Valorem Tax) 5%

14.1

- (Shift)

-

-

EC 111 84

P S1

Q Q1 Q0 0

P1 P0

T T

S0

P

P1 P0

S0

S1

T T

0 Q0 Q1 Q

- (Shift)

EC 111 85

-

-

( )

P

Q Q0 Q1 0

D0 D1

P0 P1

T T

P

D1

T P0

P1

T D0

0 Q1 Q0 Q

EC 111 86

14.2 1.

Ed

- Ed ()

- Ed ()

- Ed = 0

- Ed =

2. ES

- ES () )

- ES () )

- ES = 0

- ES =

EC 111 87

14.3 1.

1.1 Ed = 0

P D

E

S

S1

E1

0 Q0 Q

P1 P0

= .. P1 E1 E P0

1.2 Ed < 1

= .. P1 E1 A P0 = .. P0 A B P2

EC 111 88

P

D

E

S E1

S1

B A

P1 P0 P2

0 Q1 Q0 Q

1.3 Ed = 1

= .. P1 E1 A P0 = .. P0 A B P2

P

D

E

S E1

S1

B A

P0 P1

P2

0 Q1 Q0 Q

1.4 Ed > 1

= .. P1 E1 A P0 = .. P0 A B P2

EC 111 89

1.5 Ed = = .. P0 E1 A P1

Q Q1 0

P

D

E P0

P1 S E1

S1

P2 B

A

Q0

D E

S E1

S1

A

P

P0 P1

0 Q1 Q0 Q

2. 2.1 ES = 0

EC 111 90

= .. P0 E E1 P1

2.2 ES < 1

Q 0

P

D1

E P0 P1

S

E1 D0

Q0

Q1 Q0

P

D1

E

S

E1 D0

A B

0 Q

P0 P2

P1

= .. P0 B E1 P1 = .. P2 A B P0

EC 111 91

2.3 ES = 1 =

A B E

E1 D1

D0

S P

P0 P2

P1

0 Q

Q1 Q0

= .. P0 B E1 P1 = .. P2 A B P0

2.4 ES > 1

S

P

0

D0 D1

E1

E

A

B P0 P2

P1

Q1 Q0

Q

EC 111 92

= .. P0 B E1 P1 = .. P2 A B P0

2.5 ES = = .. P0 E1 A P1

P

P1 P0

0 Q0 Q1

S

D0 D1

E1 E

A

Q

EC 111 93

EC 111 94

3

1

1. (1) 0 (2) 0 (3) 1 (4) 1

(5) 2. 0

(1) (2) (3) (4) (5)

3. 1 (1) (2) (3) Rectangular Hyperbola (4) (5)

4. (1) Ed = 0 (2) Ed = 1

(3) Ed = (4) 1, 2 (5) 1, 2 3

EC 111 95

5. P

P0

D

0 Q (1) 0 (2) 1 (3) 1 (4) 1

(5) 6.

40

P 50

E

0 Q

E

(1) 54

(2) 45

(3) 5 (4) 4 (5)

EC 111 96

7. AB AC 2

E F

A

0 C B

E

(1) F (2) F

(3) F (4) 0 (5)

8. 10 100 15 80 10

(1) -.25 (2) -.4 (3) -.5 (4) -4 (5) -5

9. 10 8 20 6 10

(1) -.25 (2) -.33 (3) -.66 (4) -.4

EC 111 97

(5) 4

10. 9 Arc Elasticity (1) -.25 (2) -.42 (3) -.66 (4) -.23 (5) -4

11. X = -5

(1) X 1% X 5%

(2) 1% X 5%

(3) Y 1% X 5%

(4) X X 5%

(5) 12.

(1) (2) (3) (4) (5)

13. 1 (1) (2) (3) (4) (5)

14. (1) (2)

EC 111 98

(3) (4) (5)

15.

(1) (2)

(3) (4) (5)

16. (Inferior Goods) (1) (2) (3) (4) (5)

17. (1) (2) (3) (4) (5)

18. = 0 (1) (2) (3) (4) (5)

19. (1) 0 (2) 1 (3) 1 (4) 1

(5) EC 111 99

20. 1 (1) Rectangular Hyperbola

(2) 45 (3) (4) (5)

21.

(1) (2) 1 (3) 1 (4) (5) 1

22. (1) (2) (3) (4) (5)

23. (1) Supply (2) Supply

(3) Demand (4) Demand (5) 1 3

24. (1) (2) (3) (4)

EC 111 100

(5) 25. P

S A

D

10

8

6

B

Q

D

6 8 Q .............. .............. (1) 12,12 (2) 60, 36 (3) 16,16 (4) 36, 48 (5)

2

1. 2. 10 20

15 18 (Point Elasticity of Demand) (Arc Elasticity of Demand)

EC 111 101

3.

4.

5. 15,000 8 20,000 10

6. X Y (EXY) . EXY = -5 . EXY = 2 . EXY = .3

X Y

7. (ES) 5

8. 1 9.

10.

EC 111 102

4

(The Theory of Consumer Behavior) (Individual

Demand) 2

- (Cardinal Utility Theory) - (The Indifference Curve Theory)

1. (Utility Theory)

(Utility Theory) 1

1.1 (Basic Assumption) 1. Util 1

20

2. (Rational)

3. (Independence of Utility)

EC 111 103

4.

5. (Diminishing Marginal Utility) (Law of Marginal Utility)

1.

2.

: : :

1.2 (Concept of Utility) (Utility)

(Util)

EC 111 104

2.

(Total Utility : TU)

(Marginal Utility : MU)

1

MU = QTU

(TU) = MU n

TUn = MU1 + MU2 + MU3 + . . . + MUn

TUn = =n

1iiMU

TUn = n

MU1 + MU2. . .MUn = 1, 2,. . . n

EC 111 105

3. (The Law of Diminishing Marginal Utility)

4. (Utility Schedule and Curves)

plot

4.1

(Total Utility)

(Marginal Utility)

0

1

2

3

4

5

6

7

0

10

18

24

26

26

23

16

10

8

6

2

0

-3

-7

EC 111 106

4.1 (TU) (MU) (TU) (MU) 0 (TU) (MU)

5

10

15

20

25

0

TU

TU

1 2 3 4 5 6 7

25 20 15 10

5

1 2 3 4 5 6 7 0

MU

MU

4.1

EC 111 107

5.

5.1 (Free Goods)

TU MU = 0

5.2

(1) X

MUX = PX

(2) 1 n (I)

(2.1) (Pa = Pb = . . . = Pn)

MUa = MUb = .= MUn

PaQa + PbQb + .+PnQn = I

EC 111 108

(2.2)

(Pa Pb . . . Pn)

n

n

b

b

a

a

PMU

PMU

PMU ===

PaQa + PbQb + .+PnQn = I

4.1

(X)

MUX

0 1 2 3 4 5 6 7

- 10 8 6 2 0 -3 -7

EC 111 109

MUX = PX

x 10 X 1

MUX = PX

X (PX) 8 (X) 2

X 8 X 2 MUX = PX 16 (8 x 2 = 16) X 2 = 10 + 8 = 18

= 18 16 = 2

= 2

(Consumer Surplus)

AB OAB

EC 111 110

A

P C

0 Q B

= OP OQ

= .. OPCQ ( OP x OQ) = .. OACQ = .. PAC = .. PAC = 0

1

12 X Y 1 X Y X Y

EC 111 111

MUX MUy1 2 3 4 5 6 7 8

40 36 32 28 24 20 12 4

30 29 28 27 26 25 24 20

x y MU

MUX = MUY

X = 5 Y = 7 MUX = MUY = 24 = 40+36+32+28+24+30+29+28+27+26+25+24 = 349

1

30 2 X Y PX= 4, PY= 2

X Y X Y

EC 111 112

MUX MUy1 2 3 4 5 6 7 8

32 28 24 20 16 12 8 4

22 20 18 16 14 12 10 8

X

X

PMU

= Y

Y

PMU

PX= 4 PY= 2 PX= 2 PX= 7 Q MUX MUY MUX / PX MUY / PY MUX / PX MUX / PX1 2 3 4 5 6 7 8

32 28 24 20 16 12 8 4

22 20 18 16 14 12 10 8

8 7 6 5* 4 3 2 1

11 10 9 8 7 6 5* 4

16 14 12 10 8 6 4 2

32/7 4 24/7 20/7 16/7 12/7 8/7 4/7

5P

MUP

MU

Y

Y

X

X ==

EC 111 113

X = 4 Y = 7 30

PXQX + PYQY = 30

(4)(4) + (2) (7) = 30

30 = 30

- x 2 Py

-

X

X

PMU

= Y

Y

PMU

= 4

X = 7

Y = 8

- PX 7 PY

-

4P

MUP

MU

Y

Y

X

X ==

X = 2

Y = 8

PX QX PX QX2 4 7

7 4 2

plot X

EC 111 114

QX 2 4 7

2

4

7

D

0

PX

6. (The Indifference Curve Theory)

1. (Rationality)

2.

3. 4.

7.

7.1 (Indifference Curve) (Combination) 2

EC 111 115

4.2 x y

x y a b c d e f

1 2 3 4 5 6

16 11 7 4 2 1

Y

16

11

7

4

1 2

1 2 3 4 5 6 X

a b

c

d

e

f

IC

4.2

EC 111 116

7.2 . .

.

. 2

7.3 2 (Marginal Rate of Substitution)

1

4.3 x y

y x MRSxy MRSyxa b c d e f

16 11 7 4 2 1

1 2 3 4 5 6

-5 -4 -3 -2 -1

-1/5 -1/4 -1/3 -1/2 -1

EC 111 117

MRSXY = XY

MRSYX = YX

8. (Budget Line or Price Line)

8.1 2

100 2 X Y X (PX) = 10 Y (PY) = 5 X Y

4.4 2

X Y 0 1 2 3 4 5 6 7 8 9 10

20 18 16 14 12 10 8 6 4 2 0

EC 111 118

I = PXQX + PYQY 100 = 10 QX + 5QY

4.3

Slope =

Y

YPXP

2 4 6 8 10 X

2 4 8 10

12 14 16 18 20

1010100

PX==

5100 == 20

PY

EC 111 119

8.2

)

4.4

PX AD

4.4 (b) AB

PY BC

PY BD

2

(1

4.4 (a) AB

PX AC

D B C X

Y Y

A

x

C

A

D

B

X (b) Y (a)

EC 111 120

(2)

CD

9. m)

Y

A

C

E

0 F B D X

4.5

AB

EF

(Consumer Equilibriu

EC 111 121

(1) ) Slope slope

(3) M

(2

RSXY = Y

X

PP

E

x = Ox1 y = Oy1

y

A

y

4.6

x 0 x1

1

IC1 IC

B

E

EC 111 122

10.

-

- -

X P2 AB1

(Price Consumption Curve : PCC)

Y X P1 E X = OX1 Y = OY1

E1 X OX2 Y OY2

EC 111 123

4.7

Y1

X X X

-

4.7 x P1 P2 OX1 OX2 plot

0 X1 X2 B B1 X

Y2 PCC

IC

E1 E

A

Y

IC1

EC 111 124

AB A1BB1 E E1 (Income Consumption Curve : ICC)

Y

E E1

IC

IC1

ICC

A1

A

Y2

Y1

0 X1 X2 B B1 X

4.8

(Engel Curve)

X

EC 111 125

Engle Curve

B

C

0 X1 x2 x

4.9

EC 111 126

4

1

1. (1) (2)

(3)

(4) (5)

2. (1) (2)

(3) (4)

(5)

3. (1) (2)

(3) (4)

(5)

4. Law of Diminishing Marginal Utility (1) (2)

(3) (4)

(5)

EC 111 127

5. MUX = 0 (1) (2) (3) (4) (5)

6. (1) (2) (3) (4) (5)

7. (TU) (MU) (1) (2)

(3) (4)

(6) 8.

(1) (2)

(3) (4)

(5)

EC 111 128

9. 40

(1) TU = 40 (2) MU > 40

(3) MU = 40 (4) P < 40

(5) TU > 40

10. 2

(1) X

Y

Y

X

PMU

PMU = (2) MUX = MUY

(3) Y

Y

X

X

PMU

PMU = (4) MUX = 0 , MUY = 0

(5) MUX = PY , MUY = PX11. MUX MUY

Q MUX MUY1 2 3 4 5

35 32 30 24 18

40 36 32 24 20

8 X Y 1 X Y

(1) X = 2 Y = 3 (2) X = 5 Y = 3

(3) X = 3 Y = 5 (4) X = 4 Y = 4

(5) X = 5 Y = 2

EC 111 129

12. 11 (1) 48 (2) 64

(3) 121 (4) 132

(5) 253

13. (1) 2 (2) 2 (3) 2 (4) 2 (5)

14. (Budget Line) (1) 2 (2) 2 (3) 2 (4) 2 (5) 2

15. MRSXY = -5 (1) X = 1 Y = 5 (2) X = 1 Y = 5 (3) Y = 1 X = 5 (4) Y = 1 X = 5 (5) Y = 1 X = 1/5

EC 111 130

16. (1) (2)

(3) (4)

(5)

17. (1) (2)

(3) (4)

(5)

18. ......

(1) (2)

(3) (4)

(5)

19.

(1) (Demand Curve) (2) (Price-

Consumption Curve)

(3) (Indifference Curve) (4) (Income-

Consumption Curve)

(5) (Budget Line)

EC 111 131

20.

(1) (Demand Curve) (2) (Difference Curve) (3) (Engle Curve) (4) (Income Consumption Curve) (5)

2

1.

2.

3. 4.

(TU)

(MU)

0

1

2

3

4

5

0

10

18

22

22

20

EC 111 132

. (MU) . . 8

5. 2 X Y MU

Q MUX MUY1

2

3

4

5

6

7

20

18

16

14

12

10

8

14

12

10

8

6

4

2

. 10 PX = 2 PY = 2 X Y

. 10 PX = 4 PY = 2 X Y

6. (Indifference Curve) (Budget Line)

7.

EC 111 133

8. . MRSXY (Marginal Rate of Substitution X for Y) . ICC (Income Consumption Curve) . PCC (Price Consumption Cruve) . (Engel Curve)

EC 111 134

5

1.

(production) (inputs) (outputs) 4 1) ( ) 2) 3) 4)

2.

2

1. (Fixed Factor)

(fixed factor)

EC 111 135

2. (Variable Factor)

(variable factor)

3.

2

1. (Short Run)

(short run) 2

2. (Long Run)

(long run)

4.

(production function)

Q = f (x1 , x2 xn )

Q = ()

x1 , x2 , xn =

EC 111 136

5.

5.1

1. (Total Product : TP)

(total product:)

TP = f ( 21 X,X )

2. (Average Product : AP)

(average product) 1

AP = 1X

TP

3. (Marginal Product : MP)

(marginal product) 1 1

EC 111 137

MP = 1X

TP

TP = = 1X

5.2

3 5.1 5.1

5.1

:

2X ()

:

1X ()

: TP ()

: AP ()

: MP ()

3

3

3

3

3

3

3

3

1

2

3

4

5

6

7

8

10

23

43

57

68

75

75

66

10

11.5

14.3

14.3

13.6

12.5

10.7

8.3

10

13

20

14

11

7

0

-9

EC 111 138

MP

Stage I Stage II Stage III

TP

1X 3 4 7

75

20 14.3

O

Tangent from Origin

5.1

1. 1 (Stage I )

0 5.1 5.1 X1 0 4

EC 111 139

2. 2 (Stage II )

5.1 5.1 X1 4 7

3. 3 (Stage III)

5.1 5.1 X1 7

5.3

(Law of Diminishing Marginal Product) 1 MP 5.1 5.1 X1 3 MP 2 3 18 4 14 5, 6 , 7 8 ( ) (1X 2X ) 2

EC 111 140

6.

(isoquant isocost approach) 2

(Definition of Isoquant Curve) (isoquant curve: ISQ)

2 5.2 5.2

5.2 X Y 300

X () Y ()

0 1 2 3 4 5

18 11 6 3 1 0

EC 111 141

Y

15

10

5

O 1 2 3 4 5 X

5.2

5.2 5.2 300 2 2 300 X 0 Y 18 X 1 Y 11 , , 300

2 2 2 2

Isoquant Curve=300

EC 111 142

(convex to origin) 2

- (slope) 2

- (isoquant map) (indifference curve : IC) ISQ 5.3

ISQ3 = 300 ISQ2 = 200 ISQ1 = 100

Y

O X

5.3

5.3 (isoquant map) ISQ1 = 100 ISQ2 = 200 ISQ3 = 300 ISQ1< ISQ2 < ISQ3

EC 111 143

6.2 (Marginal Rate of Technical Substitution : MRTS)

1

2 X Y X 1 Y X 1 Y X Y MRTS X Y

MRTS XY = - Y = X =

5.3 X Y

X

() Y ()

X ()

Y ()

MRST XY

0 1 2 3 4 5

18 11 6 3 1 0

- 1 1 1 1 1

- -7 -5 -3 -2 -1

- -7 -5 -3 -2 -1

EC 111 144

Y

ISQ = 300

X

18

11

6

Y

3 1

O 1 2 3 4 5 X

5.4 X Y

5.3 5.4 MRTS X Y 300 X 1 Y 7 , X 1 Y MRTSXY (diminishing marginal rate of technical substitution)

6.3 (Definition of Isocost Curve) (isocost curve: ISC)

2

EC 111 145

B C = 20

24 C

C = 40 = A PY Isocost Curve

8 O

Y

X

PX

5.5

5.5 (cost : C) X Y 400 X 20 (PX = 20 ) Y 10 (PY = 10 ) X Y X 20 B (B = C/PX = 20 ) Y X Y 40 A (A = C/PY = 40 ) X Y X Y AB X Y

EC 111 146

2 X 8 Y 24

= ( X X) +

( Y Y)

Total Cost = (PX x QX) + (PY x QY)

= (20 x 8) + (10 x 24)

= 160 + 240

= 400

AB 400 AB X Y 400 AB 400 ISC

=

= -C/PY = -PX C/PX PY

= -20 10

= -2 AB 2

6.4

EC 111 147

X

C PY

C , PX = PY

C , PX = PY

Y

PX

PX C PY

C PX

C PX

Y

X

() / () X /

X Y X Y

Y /

EC 111 148

O C X PX

C PY

Y

PY

PY

() Y / X

5.6

5.6 () X Y X Y X Y

X Y X Y X Y

5.6 () Y X X X Y X Y

EC 111 149

X X Y

5.6 () X Y Y Y X Y X Y Y X

6.5 (producers equilibrium)

1) (Minimize Cost with a Given Output)

2

EC 111 150

Y

5.7

5.7 ISQ1 A1BB1 (ISC1) , A2B2B (ISC2) A3BB3 (ISC3) A1B1B (ISC1) ISQ1 ISQ1 D E A3BB3 (ISC3) ISQ1 D E ISQ1 C C C X Y OX1 OY1

C

A3 A2 A1

Y1 E

D

ISQ1

ISC1 ISC2 ISC3 X O X1 B1 B2 B3

EC 111 151

=

MRTS XY = -PX PY

- Y = -PX X PY

2) (Maximize Output with a Given Cost)

2

Y

X X1 B1

A1

Y1 C

ISQ2

ISQ3

ISQ1 ISC1

D

5.8

EC 111 152

5.8 A1BB1 (ISC1) ISQ1 , ISQ2 ISQ3 ISQ3 A1B1B D E ISQ1 A1B1 D E C C X Y OX1 OY1 C

7.

2 () ()

EC 111 153

Y

X O

A3 A2

5.9

5.9 C1 - ( A1BB1 ISC1 ISQ1 C1) X Y A1B1B (ISC1) A2BB2 (ISC2) A3B3B (ISC3) ISQ1 ISQ2 ISQ3 C2 C3 C1 , C2 C3 (expansion path) OS

8.

(The Principle of Returns to Scale)

A1

B1 B2

S Expansion Path

C3 2

1

1

C

ISQ1 ISQ2ISQ3

C

ISC ISC2 ISC3

EC 111 154

(returns to scale)

Q = f (x1 , x2 ) Q =

x1 , x2 =

= =

3

1. (Increasing Returns to Scale)

(increasing returns to scale) 10 % 10 % > 5.10

ISQ3

ISQ2 ISQ1

O X

Y

5.10

EC 111 155

5.10 ISQ 10 % X Y ISQ2 ISQ3 ISQ1 ISQ2 (economics of scale)

2. (Decreasing Returns to Scale)

(decreasing returns to scale) 10 % 10 % < 5.11

ISQ3 ISQ2

O X

Y

ISQ1

5.11

5.11 ISQ 10 % X Y ISQ2 ISQ3 ISQ1

EC 111 156

ISQ2 (diseconomies of scale)

3. (Constant Returns to Scale)

(constant returns to scale) 10 % 10 % = 5.12

ISQ3 ISQ2

ISQ1

O X

Y

5.12

5.12 ISQ 10 % X Y ISQ2 ISQ3 ISQ1 ISQ2 (economics of scale) (diseconomics of scale)

EC 111 157

EC 111 158

5

1

1. (production)

2. (production function)

3. (TP) (AP) (MP)

4. ()

()

TP ()

AP ()

MP ()

4 0 ... 1 20 ... 2 ... 23 3 ... 30 4 24.3 5 ... 21 6 22.5 7 ... 0 8 ... -19

5. (Law of Diminishing Marginal Product)

EC 111 159

6. (isoquant curve) (indifference curve)

7. (isocost curve)

8.

9. (expansion path)

10. (Principle of Returns to Scale)

2 ( ) ( ) ( ) ( ) 1.

( ) 2.

( ) 3.

( ) 4. 2

( ) 5. (marginal product : MP) (total product :TP)

( ) 6. (average product : AP) (marginal product : MP) (average product :AP)

( ) 7. (marginal rate of technical substitution : MRTS)

EC 111 160

( ) 8.

( ) 9.

( ) 10. (expansion path)

3

1. ........................................................................................................... .........................................................................................................................................

2. .................... .........................................................................................................................................

3. (MP) (TP) ..................... 4. (isoquant) .............................................................................

.........................................................................................................................................

5. (isocost) ................................................................................. .........................................................................................................................................

6. ........ .........................................................................................................................................

7. (law of diminishing marginal product) ..............................................................................................................

.........................................................................................................................................

.........................................................................................................................................

8. (returns to scale) .............................................................

EC 111 161

9. .........................................................................................................

10. ...............................................

4

1. (1) (2) (3) (4) (5)

2. (1) (2) (3)

(4) (5)

3. (1) (2) (3) (4) (5)

4. 1 (1) (2) MP AP

EC 111 162

(3) MP (4) MP AP (5) MP

5. (1) (2) (3) (4) (5)

6. (1)

(2) (3) (4) (5)

7. (1) TP ,MP AP (2) (3) (4) (5) TC , MC AC

EC 111 163

8. (1) (2) (3) (4) (5)

9. (1) (2)

(3) (4)

(5)

10. (1) MP AP (2) MC AC (3) (4) (5)

EC 111 164

EC 111 165

6

1.

1.1 1. (Opportunity Cost)

A B, C , D , . (opportunity cost)

EC 111 165

2. (Accounting Cost and Economic Cost)

() (Accounting Cost)

(accounting cost) (explicit cost)

() (Economic Cost)

(economic cost) (explicit cost) (implicit cost)

(opportunity cost)

=

= +

3. (Direct Cost and Indirect Cost)

() (Direct Cost)

(direct cost)

EC 111 166

() (Indirect Cost)

(indirect cost)

4. (Private Cost and Social Cost)

() (Private Cost)

(private cost) (internal cost)

=

() (Social Cost)

(social cost) (internal cost) (external cost)

(external cost)

= +

(explicit cost) (implicit cost)

EC 111 167

1.2 (the short - run cost analysis)

2 (fixed factor) (variable factor) (fixed cost) (variable cost)

1.

() (Total Fixed Cost : TFC)

(total fixed cost )

() (Total Variable Cost : TVC)

(total variable cost)

() (Total Cost : TC)

(total cost)

TC = TFC + TVC

EC 111 168

() (Average Fixed Cost : AFC)

(average fixed cost) 1

AFC = TFC Q

() (Average Variable Cost : AVC)

(average variable cost) 1

AVC = TVC Q

() (Average Cost : AC)

(average cost) 1 AC = TC Q = TFC + TVC Q = AFC + AVC

() (Marginal Cost : MC)

(marginal cost) 1

EC 111 169

MC = TC Q = (TFC + TVC) Q = O + TVC Q

= TVC Q

TVC = Q =

MC TC TVC

2.

EC 111 170

6.1

(Q)

(TFC)

(TVC)

(TC)

(AFC)

(AVC)

(AC)

(MC)

0 1 2 3 4 5

6 6 6 6 6 6

0 7 9 18 35 66

6 13 15 24 41 72

- 6 3 2 1.50 1.20

- 7 4.50 6 8.75 13.20

- 13 7.50 8 10.25 14.40

- 7 2 9 17 31

TC

TVC

TFC

O

6.1 (TFC) (TVC) (TC)

EC 111 171

AFC

AVC

AC

MC

O

6.2 (AFC) (AVC) (AC) (MC)

6.1 6.1 6.2

() (TFC)

(TFC)

() (TVC)

(TVC) (origin) TVC (MC )

EC 111 172

TVC (MC )

() (TC)

(TC) TVC TFC TVC TC = TFC + TVC TC TVC TFC

TC 2 TFC TVC (isoquant curve) (isocost curve) 6.3 Y

Expansion Path

E1

E/1 E2 E3

O

N1

Y1

N3N2

E/3

M1 M2 M3 X O

OQ2

Q1 Q2 Q3

TC

OQ3

OQ1

C/3C/2C/1

() ()

6.3 TC

6.3 () Y X X Y OY1

EC 111 173

2 OQ1 E/1 OC/1 OQ1 OQ2 OC/2 E2 OY1 X Y OQ2 2 OQ3 E3 E/3 OC/3 Y TC 6.3 ()

() (AFC)

(AFC) AFC TFC AFC Rectangular Hyperbola AFC AFC

() (AVC)

(AVC) (U Shape) AVC AVC AVC (average product : AP)

AVC = Q

TVC

X = , Px = X

EC 111 174

AVC = QXPx

= MP1Px ( Q = AP)

AP AVC AP AVC 6.4

() (AC)

(AC) AFC AVC AC AVC AFC AC AVC AC AVC AFC AC AVC AC AFC AVC AVC AVC AFC AC AVC AFC AC AC (Optimum Rate of Output) 6.2

() (MC)

(MC) AC AVC MC AC AVC AC AVC ( MC AC AVC AC AVC) MC (marginal product : MP)

EC 111 175

MC = Q

TVC

= Q

)XP( x

= QXPx

= MP1Px ( Q

X

= MP)

MP MC MP MC MP MC 6.4

EC 111 176

O

AP MP

() AP MP

() AVC MC MC AVC

O

6.4 AVC AP MC MP

EC 111 177

1.3 (the long - run cost analysis)

1. (Long - Run Total Cost : LTC)

(long - run total cost) LTC STC LTC LTC LTC 6.5

EC 111 178

Y

N3 C

E1

E2

E3N2

N1

O M1 M2 M3 X O Q1 Q2 Q3

OQ3

OQ2C2C1

C3

LTC

OQ1

() ()

6.5 LTC

6.5 OC (expansion path) E1 , E2 E3 X Y OC1 , OC2 OC3 OQ1 , OQ2 OQ3 LTC LTC STC 6.6

EC 111 179

O

P Q

R STC1

STC3 T LTC STC2

6.6 LTC LTC STC

6.6 3 OY1 , OY2 OY3 STC1 , STC2 STC3 STC1 , STC2 STC3 LTC OPQR LTC OT LTC STC

2. (Long - Run Average Cost : LAC)

(long - run average cost) 1

LAC = Q

LTC

EC 111 180

6.6 STC1 , STC2 STC3 SAC1 , SAC2 SAC3 6.7

LAC

SAC3SAC2

SAC1

A

B

O Q1 Q/2 Q2 Q3

C

6.7 LAC LAC SAC

6.7 LAC (U Shape) ( C) (OQ3) (economies of scale) (Optimum Scale of Plant) 3 SAC3 (Optimum Rate of Output) OQ3 (diseconomies of scale) LAC

EC 111 181

6.7 OQ1 1 (SAC1) Q1 Q2 2 (SAC2) OQ/2 1 (SAC1) 3 (SAC3) AQ/2 2 (SAC2) BQ/2 1 3 OQ2 3 LAC SAC LAC 6.8

O

6.8 LAC

EC 111 182

LAC SAC

6.6 6.7 (TC) (AC) 6.9

P Q

R STC1 STC2

O Q0 Q1 Q2 Q3

SAC3 SAC2 SAC1

LTC

L A C

STC3

() SAC LAC

() STC LTC

O Q0 Q1 Q2 Q3 6.9 STC LTC SAC LAC

EC 111 183

3. (LongRun Marginal Cost: LMC)

(long run marginal cost) 1 1

LMC = Q

LTC

= Q

LTVC

( TFC = 0)

LTC LAC LMC

LAC

SAC3SAC2

SAC1

O Q0 Q1 Q2 Q3

SMC2

SMC1

LMC SMC3

6.10 LMC LMC SMC

EC 111 184

6.9 () () OQ0 STC1 LTC (STC1 > LTC) SAC1 LAC (SAC1 > LAC) OQ0 STC1 LTC (STC1 = LTC) SAC1 LAC (SAC1 = LAC) OQ0 STC1 LTC LTC STC1 LTC STC1 OQ0 OQ0 LMC SMC1 (LMC > SMC1) LMC LTC SMC1 STC1 OQ0 STC1 LTC SMC1 LMC (SMC1 = LMC) Q0 Q1 STC1 LTC (STC1 > LTC) SAC1 LAC (SAC1 > LAC) SMC1 LMC (SMC1 > LMC) STC1 LTC STC LTC (STC = LTC) SAC LAC (SAC = LAC) SMC LMC (SMC = LMC) SMC LMC SAC LAC 6.10

4.

LAC (U-Shape) LAC LAC (economies of scale) (diseconomies of scale)

1)

EC 111 185

2)

3)

4)

LAC

(internal economies) (internal diseconomies) LAC (external economies) (external diseconomies) LAC LAC LAC 6.11

EC 111 186

O

LAC2 LAC0 LAC1

6.11 LAC

6.11 LAC0 LAC1 LAC0 LAC2

2.

2.1

EC 111 187

2.2

1) (Total Revenue : TR)

(total revenue) (P) (Q)

TR = P x Q

2) (Average Revenue : AR)

(average revenue) 1 (P)

AR = QTR =

QQP = P

3) (Marginal Revenue : MR)

(marginal revenue) 1

MR = TR = TR Q

TR = Q =

2.3

1)

(TR) (AR) (MR) 6.2 6.12

EC 111 188

6.2 TR, AR MR ()

Q ()

P (/)

TR = P x Q ()

AR = QTR = P

(/)

MR = QTR

(/) 1 2 3 4 5 6 7 8 9 10

10 9 8 7 6 5 4 3 2 1

10 18 24 28 30 30 28 24 18 10

10 9 8 7 6 5 4 3 2 1

10 8 6 4 2 0 -2 -4 -6 -8

EC 111 189

6.12 ()

6.2 6.12 TR , AR MR

(1) TR (origin) AR MR

(2) TR MR (3) TR MR TR MR

(4) AR MR MR AR MR 2 AR

Q = a1 a2P a2P = a1 Q

P = 2

1aa

2aQ1

AR ..(1)

O 6

30

10

20

MR

AR TR

EC 111 190

P x Q = 2

1aQa

2

2

aQ1 TR

QTR

= 2

1aa

2aQ2

MR .(2)

(1) (2) AR 1/a2 MR 2/a2 MR 2 AR

AR MR MR 2 AR

2)

(TR) (AR) (MR) 6.3 6.13

EC 111 191

6.3 TR, AR MR ()

Q ()

P (/)

TR = PxQ ()

AR = TR = P Q (/)

MR = TR Q (/)

1 2 3 4 5 6 7 8 9 10

10 10 10 10 10 10 10 10 10 10

10 20 30 40 50 60 70 80 90 100

10 10 10 10 10 10 10 10 10 10

10 10 10 10 10 10 10 10 10 10

TR

10

O

AR = MR = P

6.13 (

6.3 6.13 TR , AR MR

EC 111 192

(1) TR (origin) AR MR

(2) TR AR MR

AR = QTR

= Q

QP = P

MR = QTR

dQdTR

MR = dQ

QdP =

dQPdQ

= P

AR = MR = P

3.

3.1

(profit)

= (TR) (TC)

3.2

1) (Normal Profit) (Excess Profit) (Loss)

EC 111 193

(normal profit) (opportunity cost) (TR) (TC) (excess profit) (loss)

TR TC = 0

TR TC > 0

TR TC < 0

2) (Profit Maximization) (Loss Minimization)

(profit maximization) (loss minimization) TR TC

( TR TC ) 6.14 6.4

EC 111 194

O Q*

TC

Q*

Q*

() TR TC

MC () MR MC

()

O

O

MR

6.14

EC 111 195

6.14 OQ* TR TC

TR = QTR

= MR

TC = QTC

= MC

MR = MC

6.4 ( TR MR ) Q ()

TR ()

MR (/)

TC ()

MC (/)

/ ()

0 0 - 5 - -5 1 40 40 50 45 -10 2 75 35 62 12 13 3 105 30 77 15 28 4 130 25 94 17 36 5 150 20 114 20 36 6 165 15 140 26 25 7 175 10 175 35 0 8 180 5 221 46 -41

EC 111 196

6.4 (Q) 5 TR>TC (150 >114 ) MR=MC (20 =20 ) 36

( TR TC) MR = MC 6.15 6.5

EC 111 197

O Q*

TC

TR

Q*

Q*

() TR TC

MC () MR MC

O

O

MR

()

6.15

EC 111 198

6.5 ( TR MR ) Q ()

TR ()

MR (/)

TC ()

MC (/)

/ ()

0 0 - 8 - -8 1 40 40 68 60 -28 2 75 35 98 30 -23 3 105 30 119 21 -14 4 130 25 130 11 0 5 150 20 150 20 0 6 165 15 177 27 -12 7 175 10 216 39 -41 8 180 5 257 41 -77

6.15 6.5 OQ* 5 TR=TC (150 =150 ) MR=MC (20 =20 ) 0 (loss minimization) ( TR TC ) MR = MC 6.16 6.6

EC 111 199

TC

Q*

Q*

TR () TR TC

MC ()

MR

MC

O

O

()

MR

O Q*

6.16

EC 111 200

6.6

( TR MR ) Q ()

TR ()

MR (/)

TC ()

MC (/)

/ ()

0 0 - 15 - -15 1 40 40 72 57 -32 2 75 35 113 41 -38 3 105 30 130 17 -25 4 130 25 148 18 -18 5 150 20 168 20 -18 6 165 15 192 24 -27 7 175 10 223 31 -48 8 180 5 270 47 -90

6.16 6.6 OQ* 5 TR

EC 111 202

6

1 / ( ) X ( )

( ) 1.

( ) 2. (AFC)

( ) 3. (AC)

( ) 4. (external cost)

( ) 5. (TFC)

( ) 6. (AVC) ( U - shape)

( ) 7. STC

( ) 8. TC TVC

( ) 9. (marginal cost) 1

( ) 10. (profit) (total revenue : TR) (total cost :TC)

2

(1) .............................................................. .......................................................

EC 111 203

(2) ............

......................................................................................................................................

(3) ...............................................................

(4) (TR) TR ................................................................................................ TR .........................

(5) (opporturnity cost) ..................................................... ..............................................................................................................................

3

1. (explicit cost) (1) (2) (3) (4) (5)

2. U Shape (1) (AFC) (2) (AVC) (3) (AC) (4) (TC) (5) (2) (3)

3. (1) (TVC) (2) (AFC) (3) (MC) (4) (Internal cost)

EC 111 204

(5) (AVC) 4. (SMC)

(1) TC / Q (2) TFC / Q (3) AC / Q (4) TVC / Q (5) (1) (4)

5. (1) (external cost) (2) (internal cost) (3) (social cost) (4) (implicit cost) (5) (explicit cost)

6. (1) (2) (3) (4) ( 5)

7. (1) (2) (3) (4) (5)

8. (1) AC = TFC + TVC/Q (2) MC = (TFC +TVC) /Q

(3) TC = TFC + TVC (4) AVC = TVC / Q (5) TVC = Q + TFC

9. (1) (2) (3) (4) (5)

10. (1)

EC 111 205

(2) (3)

(4) (5)

11 14 Q TVC TC AFC AVC AC MC 0 0 6 - - - - 1 7 13 6 7 13 7 2 9 3 4.50 7.50 2 3 18 24 2 6 8 4 35 41 1.5 8.75 17 5 66 72 1.2 13.20 14.40 31

11.

(1) 3 (2) 4 (3) 5 (4) 6 (5) 7 12. (Q=3)

(1) 7 (2) 8 (3) 9 (4) 10 (5) 11 13. (Q=2)

(1) 13 (2) 14 (3) 15 (4) 16 (5) 17 14. (Q=4)

(1) 18.50 (2) 10.25 (3) 11.50 (4) 12 (5) 13.50

EC 111 206

EC 111 207

7

1.

(market)

2.

1.1

EC 111 207

1.2

-

1.3

(spot market) (forward market)

1.4

(perfectly competitive market) (imperfectly competitive market) 1) (monopolistic competition) 2) (oligopoly) 3) (monopoly) (pure monopoly)

3.

3.1 (The number of Sellers and Buyers is large)

EC 111 208

(price market) (price taker)

3.2 (The Products is Homogeneous)

3.3 (Perfect Knowledge)

3.4 (Free Entry and Free Exit)

EC 111 209

3.5 (Free Mobility of Products and Resources)

5 (ideal market)

4.

() ( ) 7.1

EC 111 210

S1

() ()

7.1

7.1 () OP1 S1 D1 d1 7.1 () OP1 OP1 / D1 D2 S1 OP2 d1 d2 (AR) (MR) (TR) (P) (q) [TR = Pq] (AR) TR/q Pq/q P [AR = TR/q = Pq/q] (MR) dTR/dq

P2 P1

2D

d2=AR2=MR2

D1

d1=AR1=MR1

O O

EC 111 211

Pdq/dq + qdP/dq P [MR = dTR/dq = Pdq/dq + qdP/dq = P] (AR) (MR)

5.

5.1

- () - -

1) 6

(TR > TC) (AR > AC)

EC 111 212

(MR = SMC) S

a

P1

SMC

D

() ()

7.2

7.2 a MR = SMC Oq1 OP1 Oc Oq1 (AR > AC) P1c ab (excess profit)

= - = TR - TC = (OP1 x Oq1) (Oc x Oq1)

= OP1aq1 - Ocbq1

P1

cd=AR=MR

b

AC

O O q1

EC 111 213

= cP1ab 2)

TR TC MR = SMC AR = AC (normal profit) a

d=AR=MR P1

O

() ()

7.3

7.3 a MR = SMC Oq1 OP1 (AC) AR = AC a (break even point)

O q1

P1 a

SMC

AC D

S

EC 111 214

= - = TR - TC = (OP1 x Oq1) - (OP1 x Oq1)

= OP1aq1 - OP1aq1 = 0

3) 2 (1)

TC TR (loss) (loss minimization) TR TC (TR

Pa O O q1 () () () ()

7.4 7.4

1

P1

7.4 a MR = SMC Oq1 OP1 AR < AC AR AC (AFC) ab P1c P1cba (P1c x Oq1) = - = TR - TC = (OP1 x Oq1) - (Oc x Oq1)

= OP1aq1 - Ocbq1 = P1cba

(TFC) dcbe (dc x Oq1)

c

AC AVC

SMC

e

d=AR=MR b

d

P1

S

D

EC 111 216

P1cba (P1c x Oq1) Oq1 (OP1 >Od)

(2)

S P1

AC AVC c

a

b e d

P1

SMC

D=AR=MR

O O q1

() ()

7.5

7.5 (OP1 < Od) (TFC) dcbe(dcx Oq1) P1cba (ab x Oq1) Oq1 (TVC) P1dea (P1d x Oq1) EC 111 217

= - = TR - TC

= OP1aq1 - Ocbq1 = P1cba = dcbe + P1dea = TFC + TVC

e e (shut down point)

MR = SMC = P = AR AVC

5.2

- MR = LMC /

EC 111 218

1)

S1 S2

P1

() ()

7.6

7.6 Oq1 OP1 S1 S2 OP1 OP2

P1

P2

LAC d1=AR1=MR1

d2=AR2=MR2

e1

2 e

E1

E2

SAC SMC

LMC

P2

Q1 Q2 O O q1 q2

EC 111 219

(LAC) Oq2 MR2 = SMC = LMC AR2 = SAC = LAC

2)

() ()

7.7

d2=AR2=MR2 d1=AR1=MR1

SAC SMC

e1 E1

E2

P21

2 P

D1

S2 S1

O Q2 Q1

e2

LAC

LMC

P2

1

O q1q2

P

EC 111 220

7.7 Oq1 OP1 () - S1 S2 OP1 OP2 (LAC) Oq2 MR2 = SMC = LMC AR2 = SAC = LAC -

MR = SMC = LMC = P = AR = SAC = LAC

6.

6.1

SMC SMC SMC

EC 111 221