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Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani

Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani. Study Guide Week Two (Note: You must go over these slides and complete every task outlined here before Thursday, September 13).

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Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani

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  1. Welcome to EC 209: Managerial Economics- Group ABy:Dr. Jacqueline Khorassani Study Guide Week Two (Note: You must go over these slides and complete every task outlined here before Thursday, September 13)

  2. Chapter Two: This chapter is mainly a review of what you learned in First Commerce. Send me your questions. • Demand function, schedule, and curve • What are they? • How does the demand function or schedule look graphically and why? • Slope • What is the law of demand? • How can the demand curve shift? • What are the demand determinants other than price? • What is the difference between a change in demand and a change in quantity demanded? • What is an inverse demand function? • What is the consumer surplus? • How is it measured? • Graphically? • Algebraically?

  3. Supply function, schedule, and curve • What are they? • How does the supply function or schedule look graphically and why? • Slope • What is the law of supply? • How can the supply curve shift? • What are the supply determinants other than price? • What is the difference between a change in supply and a change in quantity supplied? • What is an inverse supply function? • What is the producer surplus? • How is it measured? • Graphically? • Algebraically?

  4. Market Equilibrium • What is it? • How does it look graphically? • What is a shortage? • What is a surplus? • How can it change? • Shifts in supply curve • Effects on quantity demanded and quantity supplied • Shifts in demand curve • Effects on quantity demanded and quantity supplied • How can a change in equilibrium affect the managerial decisions?

  5. What are the different types of price restrictions? • How is a price ceiling different from a price floor? • What are some examples of price ceilings and price floors? • How does a price ceiling or a price floor affect the market? • Graph • Effects on quantity demanded and quantity supplied • What is a full economic price under a price ceiling?

  6. Chapter 3: This chapter is also mainly a review of what you learned in First Commerce. Send me your questions. • What does the elasticity measure? • How can it be shown (measured) using calculus? • What is the difference between point versus Arc (Mid-point) elasticity?

  7. What is the own price elasticity of demand? • How is it measured? • Is it positive or negative? • What is the difference between elastic, inelastic and unitary elastic demands? • How is a perfectly elastic demand curve different from a perfectly inelastic demand curve? • Which factors affect it and how?

  8. How does the own-price elasticity related to total revenue? • The case of elastic, inelastic, and unitary elastic demands • Graphical representation • How does the own-price elasticity related to marginal revenue?

  9. What is the cross price elasticity of demand? • How is it measured? • When is it positive? • When is it negative? • Suppose that a firm sells two related good and the price of one good changes; how can the cross price elasticity help us predict the changes in the total revenue?

  10. What is the income elasticity? • How is it measured? • When is it positive? • When is it negative?

  11. Uses of elasticity • How can the elasticity help the manager in his/her pricing strategies? • How can the elasticity help the manger in predicating the revenue? • How can the elasticity help the manager to determine the effects of a change in a competitor’s price?

  12. Mathematical representations of demand curves • Linear demand • What do the coefficients mean? • How are they related to elasticity? • How does it look graphically? • Log-Linear Demand • What do the coefficients mean? • How are they related to elasticity? • How does it look graphically?

  13. What is regression analysis? • How can it be used to estimate demand? • How can we interpreting the regression output?

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