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Economics 2: Spring 2014

Economics 2: Spring 2014. J. Bradford DeLong <jbdelong@berkeley.edu>; Maria Constanza Ballesteros <mc.ballesteros@berkeley.edu>; Connie Min <conniemin@berkeley.edu> http://delong.typepad.com/sdj/econ-2-spring-2014/. Economics 2: Spring 2014: Supply and Demand.

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Economics 2: Spring 2014

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  1. Economics 2: Spring 2014 J. Bradford DeLong <jbdelong@berkeley.edu>; Maria Constanza Ballesteros <mc.ballesteros@berkeley.edu>; Connie Min <conniemin@berkeley.edu> http://delong.typepad.com/sdj/econ-2-spring-2014/

  2. Economics 2: Spring 2014: Supply and Demand http://delong.typepad.com/sdj/econ-1-spring-2012/ January 29, 2014, 4-5:30 101 Barker, U.C. Berkeley

  3. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 • 5 • 1 • 1 • 0 • Our unit of acount will be the latte: £. 1£ will buy you 1 latte, always

  4. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 • 5 • 1 • 1 • 0 • At what price paid per dragon-training flight will people choose to stop pulling lattes, and start riding dragons? • Opportunity cost…

  5. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 • 5 • 1 • 1 • 0 • At a price of 1?

  6. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 • 5 • 1 x 1 = 1 • 1 • 0 • At a price of 1? Viserys only.

  7. Ladies and Gentlemen, to Your i>Clickers • How about at a price of 50? • A. Viserys only. • B. Viserys and Tyrion. • C. Viserys, John Snow, and Daenerys • D. Viserys, Aemon, and Daenerys • E. Everybody

  8. Ladies and Gentlemen, to Your i>Clickers • How about at a price of 50? • A. Viserys only. • B. Viserys and Tyrion. • C. Viserys, John Snow, and Aemon • D. Viserys, Aemon, and Daenerys • E. Everybody

  9. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 x 50 = 500 • 5 x 50 = 250 • 1 x 50 = 50 • 1 x 50 = 50 • 0 • At a price of 50? Viserys, Aemon, and Deanerys.

  10. Ladies and Gentlemen, to Your i>Clickers • How about at a price of 100? • A. Viserys only. • B. Viserys, John Snow, and Tyrion. • C. Viserys, John Snow, Aemon, and Daenerys • D. Viserys, Aemon, and Daenerys • E. Everybody

  11. Ladies and Gentlemen, to Your i>Clickers • How about at a price of 100? • A. Viserys only. • B. Viserys, John Snow, and Tyrion. • C. Viserys, John Snow, Aemon, and Daenerys • D. Viserys, Aemon, and Daenerys • E. Everybody

  12. A Simple Setup: Lattes and Dragon-Training Flights • Lattes per Day: • 400 • 500 • 0 • 50 • 600 • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Flights: • 10 x 10 = 1000 • 5 x 100 = 500 • 1 x 100 = 100 • 1 x 100 = 100 • 0 • At a price of 100? Viserys, Aemon, Deanerys, and Jon Snow.

  13. Opportunity Costs • Five producers: • Daenerys • Jon Snow • Viserys • Aemon • Tyrion • Lattes: • 400 • 500 • 0 • 50 • 600 • Flights: • 10 • 5 • 1 • 1 • 0 • OC: • 40 • 100 • 0 • 50 • ∞ • Productivities: D 10, JS 5, V 1, A 1, T 0 • Opportunity Costs: D 40, JS 80, V 0, A 50, T ∞ • Comparative Advantage: Viserys is inept at both dragon-training and latte-pulling, but more inept at latte-pulling. So he is the first person you want on the flight line.

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