IB Economics in a Nutshell Exam study guide

110 Pages·2015·11.07 MB·English

by  Ellie Tragakes

1BE conomics
ina N utshell
Examst uydgu ide
IBE conoimnai cNsu tshell
Exasmt ugduyi de
EllTriaeg akes
NoemPar ess
Acknowledgment
Thaeu twhoourll idtk eoex prheeisrms m egnrsaet tioPt eutRdeoerc k-Lwahcmora odaieltx lh,d e i agirtnah mbisos o k,
anwdh oof fceoruendat nlmdeo sshste lspufgugle fsotirim opnrso viebnm oettnhhdte is a garnaidmtn sh t ee xt.
1EBc onoimanNi uctss hell
NoePmrae ss
e-mnaoielm:a [email protected]
Copyr2i0g1Eh5ltT l©ri aeg akes
e-mealilli:e [email protected]
Alrli grhetsseN ropv aerdtt.hp iuosfb limcabayetr ieopnr oodtrur caendsi manin ftyot orebrmdy a nmye ans
witthhopeur wtir oirpt etremnio stfsh aieuo tanhn opdru blisher.
Diagramasss cdailgvaiebtcglitrezoa er(pd Sh VifGci) l es usoinTn rgi sBlqonultkenhslk c.saa cpnTaedrp ies quel
arfer ees/olfitabwvraaeri aelit,an bklsec aanptder .eiloi�n.rfu.go
Covpehro atrofesr W oimk iCmoemdmioan s.
DesbiyDg env elAotphnGeerntes,e, c e.
Prianntbdeo dub nyTd y poAsthhoGeprn,es e,c e.
Noe(mva6 rit,shµ Gear )ew eokfr odmr e antihnoguc,go hntcp,ee prtc,e ption.
ISB9N7 8-960-93-5931-3
11
Introduction
Thsihsog ruti deibison otket nhode eyldop ru e vailtelhwt e o poitfch ssey llbaebfutoser saetn esdx amIistns. o at
textabnocdoa kn bneou ts eadss ucIhst.h obuelu ds eadsas upplteoym oetunertx twbhoeoyrkoe,wu i flilmn odr e
in-deexpptlha noasfty iloltnaosbp uisc s.
Ketyos ymbols
Itnh ien teorbfer setvasin ttdmoy a,k cea use-arnedl-aetficfolenectsathfhr eoi, lp lsso ywmibnaogrsl eos m etuismeeds.
11' increases
U decreases
=} therieftfo olrtleho,aw ts
0 advanptoasgiceth,ia vrea cptoesricitosintvsieec q,u ence
00 disadvnaengtaactghieav,re a cnteegraictsoitnvisece ,q uence
., impoprtoaitnnnott o te
blbuoewl odr adnpsdh rassyellsta ebraumnsscd o ncepts
Note
Thbioso k
covaeltrlhst e o piitnch 1seBE conosmyilclisasn bu umsm faorrym ,
inclkueddyee sf indiitaigoarnnatsdmh, se oyroinuee set dko now,
contaag ilnosso sifa mrpyo tretramnst.
Yocua uns iett o
revtihemewa ipno ionefta sct ho paisyc oc uo vieitcrn l aasnisdyn o sutru odefice osn omics,
revqiueiwac nktdlh yo robuegfhtolersyaet n esdx ams,
makseu yroehu a vceo vearltelhtd eo piitnch ssey lltahbyauotwsu i bleel x amoinn.e d
Notaelt shoa t
HLm atearpipaealag rasia ln ispgteh atbc ahc kground,
thneu mbeortfio npigitn ch bsio sof ko ltlhonewu sm beortfih 1neeBg c onosmyilclsa bus,
diagursagemr se leintnsoe hso awni nistiitaualan tbdir oonlw inntseo hs o awnc yh anwgiett,hhe e x ceopft ion
exterdniaalgwirhtaeymgr sre e leisnnhe ostw hs eo coipatli rmuelmdi,ns heostw hs eu bop(tsiomciainlae lflfyi cient)
outcdoumteemo a rfkaeital nubdrl elu,i esn heost whp eo loiuctyc ome.
Contatchtaeiu ntgh or
t/ Iyfo hua vaenq yu esotrri eoqnausni cyrl ea rifications,
Iyfo hua vsep otatneeyrd r yoorwuso ullidtk roee port,
t/ Iyfo hua vaeno yt hceorm ments,
plewarsitetto e ha eu tahetol rl [email protected]
lll
Contents
Foundaotfei coonnso mics 1
Econoamsais coscs icaile nce 1
Centthreamle s 2
1 Microeconomics 3
1.C1o mpemtairtkiDevetems a:an ndsd u pply 3
1.E2l asticity 8
1.G3o vernimnetnetr vention 14
1.M4a rfkaeitl ure 19
1.T5h eootfrh yfe i arnmmd a rsktertu c(tHouLnr leys) 25
1.5P.r1o duacntcdio osnt s 25
1.5R.e2v enues 27
1.5P.r3oa fngidot a olffsi rms 28
1.5P.e4r cfoemcpte tition 30
1.5M.o5n opoly 32
1.5M.o6n opcoolimspteitci tion 35
1.5O.l7i gopoly 35
1.5P.r8id cies crimination 37
2 Macroeconomics 39
2.T1h lee ovoefvl e ercaolnlao cmtiicv ity 39
2.A2g gredgeamtaaenn addg gresguaptpel y 42
2.M3a croecoobnjoemcitci ves 48
2.3.1 Macorbojeecc1otL:nio ouvwmne iescm ployment 48
2.3M.a2c roecoobnjoemc2itL:cio awvn esdst arbaloteife n flation 50
2.3M.a3c roecoobnjoemc3itE:cic voensog mriocw th 54
2.3M.a4c roecoobnjoemc4itE:ciq vuieitnsth yde i stroiifbn uctoimoen 55
2.F4i spcoalli cy 58
2.M5o neptoalriyc y 59
2.S6u pplpyo-lsiicdiee s 61
3 Interneactoinoonmailc s 63
3.I1n ternational trade 63
3.E2x charnagtee s 67
3.T3h bea laonpfca ey ments 71
3.E4c onionmtiecg ration 74
3.T5e romtfsr ade 75
4 Develoepcmoennotm ics 77
4.E1c onodmeivce lopment 77
4.M2e asudreivnegl opment 79
4.T3h reo oldfeo mefsatcitco rs 81
4.T4h reo olifen tertnraatdieo nal 84
4.T5h reo olffe o rdeiirgiennc vte s(tFmOein)t 88
4.T6h reo loeffso raeiiadgn mndu ltidleavteelroaapslms einstt ance 89
47.T hreo olifen terdneabtti onal 91
4.T8h bea labnectewm eaernka entidns t ervention 92
Glossary 94
MicroecSoLtn eorm(micsco sr e) 94
MicroecHoLtn eormmisc s 95
MacroecSoLnt oemr(imccsos r e) 97
MacroecHoLnt oemrimcss 99
InterencaotniooSmnLtia eclrs (m cso re) 99
InterencaotniooHmnLtia eclrs m s 100
DeveloepcmoennoStmLt i ecrsm s (core) 101
Index 102
lV
FOUNDATOIFEO CNOSN OMICS
Economaisasc osc sicaile nce
socsicaile= na cndeyi sctihpsalttiu nadesi peesoc fht usm saonc iientcyle,uc doinnogam nitchsr,o spooclioopgloyol,gis ytc,ii cepanslcy ec,h ology
Thseo csicaile mnettihfoidc
Th11'ss s.Ia maehesIh sec 1'1efmcniet t o hd1 a nc do nsofi sIhtI o sIew f ms oot eps:
1M. akoeb servaabtoaiuq otun esso tifin otne rest. 2.Idenitmipfovryat rainnateb eldteeaosdn swtehqreu estion.
3.F ormuahl yaptoet ahbeohsuoittws h vea riaarbrele elsa ted.4 .Condtuecstttso s ei etf h hey potihsseu spipsob rytt hdeead t a.
5.It fh dea stuap ptohhreyt p otthheteshnihe sy ,p otihasec sciesp t6e.Idtf h dea dtoan ostu pptohhrtey potthheiisrssie sj,ea cnatde d
(nroetf uatncedad bn)eu seidbn u iltdhienoor ies. seabrecQhi nans e hwfy opro thesis.
Somfee atouftr hemese thoofEd c onomics
Econobmuiimslotdds e ilonsr dtesor i mptlhcieof myp leofx iTthiceee st eprairsia bsussu mipsvte iiromyn p oirEnt caonnto Immtie casn.s
three waolr alnhdd i ghtlhmieog rhietm porretlaantti onsthhiwaphtse w nes tuedcyo nomiwce c thhaenoognroelyn yv,e a riaatab le
betwveaerni aMbalnoeytfs h r.ee latiionncslihumnido pedsde ltsi mioenr, d tebore a btlsoet utdhvyea rieafbfleoenc't tshas es, s umption
arbea soenhd y potthheaasrtsee us p pobryet mepdid raitcaa.lt haalotlt hvearr iraebmlaecison n satnaudnn tc hanging.
Posivteirvsneuo sr masttiavtee ments Ani mpoarstsaunmtip entc ioonnoi mtsih ocafst
posisttiavtee= m ase tnatt aembeosnuottm etthhiiasnt,g owrwa ibsle,li; m t a y ber atieocnoanlod meicci- msaikoin=nd ge cision-
trourfe a lesx"e t;rh aeot ifen flia5st% (i"to mhnai oysrm anyo btet ruPeo}s.i tivmea ke(rcso nsufmierwmrossr,,ka enardlsr l e source-
stateamrueesn ettdsod e scerviebnaetn msda, k hey potahnetdsh eeso ries.o wnebresh}aa vcec orttodh ibeneigssr et l f-interest,
antdrt yog emto rrea tthhelaren (s mso breen efits
normasttiavtee mase tnatt ea=mb eosnuottm etthhoiauntgg th obt e e,x preas sifnrgco omn summpotrpiero ofnfr,iop tmr oduction,
subjeocptiinovirveo a nlj uued gmicetan ntbn;eot tro urfe a lesx"e t;rh aeot ifen flahtiigowhnae grae nsmd o rien cofmrseoe ml llaibnogr
itso hoi gihbs"a soenad n o pinoiwfoh nai" tst hoiog h'. sNtoartmeaamrteueisn vetedsa nodt hreers ouarnscdoeo sn,) .
tdoe tertmhgieon aoelfe s c onpoomlici cies.
Factoofpr rso duacntsdic oanr city
factoofrr osd uc=rt ieosno u=ri cnue tusss etdor edaulcoleo dasns de rvtihcaeetosl n ee eadnw da ntth;ea rrfeeo uers o rfe sources:
la=na dlnla truersaolut rhacaretaes b otvhege r o(uenfxdo restcsa,p i(atlakslno oa wspn h ysciacpai=ltm aalc)hitnoeosl,s ,
rivaegrrsi,c lualnftdiui,srtn hah s lee aan}ad ln la truersaolut rhcaetes q uipmenta,lc lof nascttriodutric iftfefirseoto,rnhm so;e t htehrr ee
aruen dtehgrer o(uenoxdin la,t guarmsai,ln erals) becaiuiisis et sape rlofd ufcaecodtpf or ro duction
lab=oa rlh lu meafnf oorwr otrt,kh ,ga otei snp troo dugcoiondgs eanntdr epre=n tehhueur mseahfnif upos rettdoo r gatnhioezt ehte hrr ee
serveixtc heweso rdko nbe t eachersl,a ewbr usli,ul mdbeerrfssa, c taoswr easls,rl i sk,-i tnankoivmnaa tnieaom ne,n t
scar=ct ihcteoy n doibfte iiolnnig m iirnte eldat tto hinoeen e adnswd a nothfsu mbaeni nfgasco:tf o rpsr oadrsuecc atwrihcoiehn lu em an
neeadnswd a natrisen fsiinnitctheeea ;rrn eeo e tn ourgehs outprorc oedseu vceer ynteheidanengwdd a ntbeyhd u mbaeni nggoosda,sn d
servairacele sso scarce
Thrbeaesq iuce stions
Scarfcoiratclyeel cs o normeigeasro,dtf lh efesoisorr ofm r ganitzaoan tsiwtoehnrrb, ea esq iuce stions:
Whattop roduce? Howt op roduce? Fowrh otmop roduce?
Whagto oadnssd e rvwiibcleepl sr odbuyc eWdh afta cotpfor rosd uwcibtleuil so entd o Howwi lglo otadhnsesd e rvpircoedsu ced
thaev airleasboluaern icdwne h sa,t prodtuhgceoe o adnssd e rvaincidewn sh ,a tb ed istraimboutnthgpee odit re unsteirasl;
quanwtiitlthilbee eyps r oduced? combinaantqdiu oannst ities? whwoi glewlth aatni,dwn h aqtu antities?
Choiacnoedp porctousnti ty
Thsec arocrfie tsyo umrecatenhssca hto ihcaevtseob em adteh:qe u eswthioatntops r odaunchdeo wto p rodiuncveco hlovietc hreaestl ate
tor esoaulrlcoec (aetxipolbnae ilno(ewTdq)h .ue e sftowirho ontm op rodiuncveo clhvoeitsch reaestl taoit nec odmies tr;is bepue5 t5i.o)n
resoaulrlcoe=c aastsiiopgnan ritnrigec suolutartorch peers o duocft iroena lloocfr aetsioou=nrc cheasnt ghiaenl gl oocfa tion
partgiocouadlnsasd re rvices resouarncde sht,eh cneoc meb iannaqdtu iaonnot gfio toidess
ansde rvpircoedsus cote hdda,it f faemroeuonnfrtt e ss ources
overalloofc arteis=oot nuom roac nreyes s ouarracese ssi tgtonh eed araes sitgeona ecgdho oadns de rvice
produocpfta irotngi ocouadlnsasd re rvtihceierossev : e rproduction
misalloofrc eastoiuo=rna c sessi tghnweir noagnm go uonft
underalolfro ecsaotu=irt oconfeo es rw e souarracese ssi tgtonh eed resoutrtoc hees p roopfd aurtcitgciouoolnada nsrsd e rvices,
produocpfta irotgnio couadlnsasd re rvtihceierussen ; d erproducrteisounilo ntv ienrga llooruc nadteiroanl location
opportcuo=nst ithtveya loufte hn ee bxetas ltt ertnhiaasstta i cvreai sfar i ecseoudmfl a tk iacn hgo itchceio;sn ciecspe tn ttroea clo nomics,
becasucsaer nceicteys scihtoaiatcnecedsh, o micoeso tf tiennv oalnov pepso rtcuonsEitxit y fyo c uh ootssote u fdoyyro euxra mtsh,e
opporctouosnyftio tcuyhr o iitsch ese a croifwf hiayctoem u o sptrleyf teodr oir nesdt oesfa tdu dIysfio ncgci,he otyot sope rso dguocoAed,t he
opporctouosnfttih ctihyso itchese a icsro iftfh iec pemr oesftae lrtreergdno aottdhi cavoteu h ladv e pbreoednwu ictteehhds amree sources.
1
Thper odupcoitbsliiistieoscn u r(vfer o(nPtoPirCPe P)rsF )h otwhse Produpcotsisoimnbo idleilt ies
maxiqmuuamn ottfiw gtooi oeedsxps o,t aatnbodie cs(y octrlwg eors o upbsi cycles
ogfo oedaxsg ,r icultaunmrdaa nlu fpgarocootdtduuhscrca)aettb dnse (uni4t0s )
prodbuyac nee cdo nwoiimtatyhvs a ilabalnetd e rcehsnToooul rocgeys.
•d
prodount chPeeP (Cap to isnutacssaho brt)h eec onmoumsyt :
30
• usiert ess ofuurtlchleemysru; bes ef t u elmlp looyafmrl eeln sto urces;
•usaeil rtles s oeufrfciecssiote hntathltiey nsr,ore e sowuarsctee .
20 · · · · · ·, .· •· ·· ·· ·• ·· · · · · ·
C ,
Iefi tohnoeebrr o ottfhh ecsoen ddiont oihtoo tnlhsdee ,c onwoimlyl
prodaatup coeii nnstti hPdePe sC ,ua csph o cia:nct te, i tthheeecr o nomy 10
doneosht a fvue(l omlra xiemmupml)o oyirmit pes rn otd,u cing inefficiently,
obro th.
0
4 6 8 10
ThPeP mCo dsehlot whfseo llowing: potat(oteosn s)
ti' Duteso c ar,ic itiist m ypotsposr iobodluuetc tsehi PedP epC o:di i nst Apto ait,nh etec onpormoyd3 u0bc iecsay nc6dlt eoosnf s
unattamienaanbiilitnsen o, gt ptoposr soidbuclcoeem btiohnfaa tt ipoont aAtptoo ebist,n.h et ec onpormoyd2 u0bc iecsay nc8dl es
goods. toonpfso tatoes.
ti' Duteso c ar,ic itins te ycestsoma arkcyeh oitcheeesc: o ntohmayt ti' Tom ovferp oomai t npoto bit,nh tee c onmoumsyt
hafsue lmlp loaynimdese f nftmi uccsihteo niotts seo pfpr ooidnuetcx t isaocnr;1io fb iicceyi conlre dtsg eoar 2i t noo npfso taTthoee s.
poaio nbrto a rn oyt phoeoirntn htPe P C. 10b icyacrlteeh osep portcuonosiitft n yc rtehaes ing
Choigcievr eists ooe p portcuonsIiittnt:s oy p to sstiion bclree aqsuea onpfto ittabyty2 to oenss .
prodouofcn tgeio owonid t dheocurtpe raosdiountfcgh o teti ghooenor d .ti' Thmeo vefmreponomtai t npoto bii nntv olves a
realloocfra etsioou.nr ces
Centtrhaelm es
Econogmriocwv tehre scuosn omic Thteh rteosa uts tainability
development Envirosunsmteanit(nataulbhs ieoelr f ie tsyo auatrp caaecnseid n
watyhsda ont od te crtehqaeus aeon drte istttyhrq eou ayol fi ty
Am agionoa gflo veranrmoetunhwnteods ri elscd o nogmriocw th
resoauvracifelofsaru b tglueern ee riatsth iroenbasypt) re ondeudc tion
(grioonwu ttphpr uotd Yuecetec do)n.o miocni otgwsmr nao nywo tth
basoentd hu eso eff o fsuseiallsws ea,lsb l yn u meortohuesr
enstuharece h ieovefec moenondmteiv ce lo(pimnecnitrn e ases
actitvhdiaettsi otedrrse o gyrn aadtreue rsaoliu nrcclefusod,ri ensgt s,
stanodlfai rivdtnish nb egr opaodpeurol afac toiuonIntm rpyo)rt.a nt
wilsdellaiit ffhgeeel,, o c blaialmn amdta enm yo rIem.p ortant
questtcoio onnsasir Hdeoe:dwr ow em easeucroen omic
quesatriWeoh:nak sti onadfcs t ilvetiauotdn i seuss tainability? Does
develoWphmafetan cpttr?oe revsce onntdo emviecl forpomme nt
econgormoinwcet che slsetaauordn i sluys dteavienlaobplmee nt?
occuUrnrdiwenhrcga o?tn ditionsd edvoeeltsoa pkemece onnto mic
Whakti nopfdo sl ciacbniep e usr tspour eodms outset ainability and
plaWcheak?ti nopdfos l sihcoibueepls ud r tseoun esdtu hraet
preevnevnitr odnemgernaatdndaadelt s itornu ction?
economic girnoetwcoto hnd oetmvrieacln osplmaetnets?
Homwu cshh ougolvde rnimnetnetirsnv enEec onomic veeffriescquius:eic ntocynyf loirc ting
markets consiosbtjeenctt ives
Alelc oniotnmh wieeo srw lotdrh kr aom uigxhot gfuo rvee rnmeEcnotn oemfifci (ctiuhesoener fc e ys oiutnrh bceee pssot s swiabyl e
actibvaisotentid hce eos m mamnedt h(owdh tehgreoe v ernmesnoat ts ao v orieds owuarsactneeed q) u (ittsyht eoa bfte eif nagi r,
usieatsus t htomora iklteaay wn srd e gultahaatelticl oo nnso miucs uianltleytr mope raeeqntu eadili nin tcyod mies triabrtuewt ioo n)
decisioinnc-lmfuaidkarienmcnrdsogs n ,s ummueasrbtsib ,dya e)n di mpoerctoanonobtmj iecIc mtpiovqreutsea.stn tcotio onnsasir dee:r
prisveacattceot rib vaisotentid hme eas r kmeett h(owdh aelrle Undwehrca otn dairteeif ofniascn eidqe unaicctyhy i Wehvaketid n?d s
econdoemciics iionnt-iemmnraa akrcektre st s taponr di croeepfsso plaoirncaedip epsr ofpoarrci haigtereve ieanftgfe irac niwdeh nacty ,
deterimmnai rnkeIedmt psoq)rtu.ae nsattr iWeoh:naa strt eh e polfioacrci heisge rveieanqtgueA irrte eyf ?f iacneidqe unictyy
benaenfddii tssa dvoagfon vtearginenmste enritvmn ea nrtkieotcnso ?n folbijcetacisstn oigmev ece osn obmeilsiAtertsveh e ce?er ret ain
Whaatrt ehb ee naenfddii tssa dvoaffnr tefaeuglneycs mt airoknceitonsng d uintdwiehorine csfh f iacneidqe unaicrctyeoy n sainsdt ent
wintogh o verinnmteenrHtvo emwnu tcaihnoi,dnwn ?h w aaty s compleeamocethnh Ater treh? pe orleti hccaiabtene us s teod
shoguolvde rnmenimtnas r kienttse?r vene prombootteh?
2
microeconomics
1.C1O MPETIMTAIRVKEED TESM:A NADN D SUPPLY
Competmiatrikveet s
mark=ae ntay r rangtehamaletln botuw ysae nrsdse ltlcoeo rmse c ompetmiatrik=ve metaa rwkheettr hepe r iocafge o osde,r voirfc aec,t or
togeatnhmdea rka ene xcha(neagxp e h ysmieceatplil naagcsa e opf roduicdste itoenrt mhirnoteuhdige nh t eroamfca tnisyom nabslu ly ers
fimsahr okares th ooocr,l asasdiisfn,it eeder tncelt , ansde llseotr hsna,oot n cea inn flutehnoecr ei ce
Demand
Undersdteamnadnidn g
dema(n0d=)t hqeu anotafgi otoytd hb auty (ecrosn suamrweeir lsal)ni adnb gtl boeu aytv arpiroiuocsve aest r i pmeer cieotdpe,ar riisb us
Thlea owfd e mand Demacnudr vIensd:i vidualm adrekdmeeatmn adn da nd
lawo fd ema=n ald aswt atthiantgi astn heegraceta iuvsea l indivdiedmuaa=nlt d hd ee maonafsd i ngle buyer
relatbieotnwspehreii(npcP a e)n qdu an(tQio)atf g y o odde mandmeadr:kd eetm a=nt dh e deomafal tnlhbd eus y ieanrm sa rkfeotub,ny d
thhei gthheperr itchleeo, w tehqreu andteimtaynt dheledo ;wt ehre adduipna glt lhi en didveimdaunadelsa cpfhro iIrcan em .a rwkiett h
pritchee, grqeuaatnedtrei mttayhnT edh eleda o.wdf e mainsd two bmuayredkreesmt,a Dnm=d ,o DBf u y1e r+o BfDu y2e.r
illubsytt rhdaeet meadcn udr, wv heiicdsho wnwsalrodp ing.
D Boufy 1e r+ D Boufy 2er;; MarkDeetm and
Whyt hdee macnudr ivdseo wnwsalrodp ing
p p p
Consudmeerrbisev nee ffribotumsy ing/cgoonoasdnusdm ing
serviTcheaesd .d itional fbrebonumey fiintgs/ codoneners 4iu -vm-e-idn g 4
more aug noioatdr c eoa flm laerindga ble ne(fMBi)At.ss w eb uy
moraenm do ruen iotafgs o otdhm,ea rgbiennaewlfe ei ntjso y + =
decr(eeatxshm eeo rseo dyaosdu r itnhlkee, bs esn eyfogiuet ftsr om 2 -";----- 2- ----:-------,- -
eacahd distoidotanh,ae lr MeBfUoS)ri.en cea sQM c BoUn sufmte,d
Om
consuwmibelerwl si ltlboiu nmygo raenm do ruen ioatfg s o oodni lfy
01 01
itpsr ifcaeTl hlesr.ea fsPo UQr,d e e mandaenvddift vc,ee r Fsoar. 0 2 3 Q 0 1 4 Q 7 Q
therseea stohndese ,m acnudr ivsae l ksnoo awsna m arginal
AtP= 4 ,m arQk= e2t + 1 = 3 a;Pt = 2 m,a rQk= e3t + 4 = 7
beneMfBic tusr ve.
Movemaelnotand ge macnudr (vceh ainnQg d ee manded)S hioftfad emacnudr (vceh aindnge em and)
Am ovement alongf otagrh o eoc ddab enec m aaunsde dc uAors nvhleoiy tff h te dceumrafvnoaedgr o ocdab nec aused ao nly by
bya c hanigtneh p er iocfte hg eo oAdc.c ortdtoih lneag ow f chanignaen o yft h neo n-pdreitceer moifdn eamnat(nssd e e
demainPfdf ,Qt U,a ntdh eirasen u pwamrodv em(eb=} n at)i P;fU , belAorw i)g.h sthwiianfrdtdi acnia ntcersie dnae smeaa nndad
afatn tdh eirasde o wnward mobv)Te.hmc eehn atni gQn(e a � leftswhaiirnftdd iacd aetcersie dnae smea Tnhdce.h aniQgnd e u teo
duteo cthhaeni gPnie cs a lalc ehda nignqe u andteimtayn dedt.hs eh iifDnti cssa lalc ehda nigdnee mand.
Demacnudr svheo wcihnagn igQned se manded Demacnudr svhei cfhtasn:ig nde esm and
p p
P1---------,- --�----
D
Qz Q Q
Non-dpertiecreom dfie nmaa(nnctdaso u dfse emsac nudrs vhei fts)
Demacnhdae nsa ntdh dee macnudrs vheii frnte sos n stefo o muari fna ctors:
Chanignte ass atnepdsr eferWehnetcnae ssat nepdsr efeorfe Cnhcaensig nte hsne u mboefbr u ye(rdse mogcrhaapnh)gIi tefchs e
consucmhearnisgfn ae v ooafgr o oDdi ,n cr(esahsrieifsgti hsft );n umboebfru yieanrm sa riknectr eDai snecsr,(e sahsrieifsgit htfsth )e;
refercehnaecn e aasi nas oto Ddd ,e cresahsilefestf st numboebfru e rdse creDad seecsr,es ahsilefestf st
Chanignei sn coTmheee f foencD dt esp eonnwd h etthhgeeor o ids :C hanignep sr iocfre esl agtoeoTddh see f foencD dt esp eonnd
(ino)r =md aelmafnotdrhg eo oidn craesac soenss uimnecro me whetthhreeer l gaotoeaddrs e :
incremaossgetos o;adr sne o rmaasil n:c ormiesD ei sn,c rease(sisu)b st=ig touottdehsssa att ais sifmyni eleaedrxm, e aatnf di asshP ;
(shriifgtahssit n)c;of maelDfl as(l,sl hsli efftts) ogf ooA(d e mxe aitn)c reDaf sogeros oB,(d e fxi isnhc)r (esahsiefst s
(iinif)e =rd ieomra fnotdrh g eo odde creaascs oenss uimnecro mer igahsPto }gf;o oAfd a lDfl osgr,o oBfd a (lslhsli efftts)
increeaxls oewse;rg -oporldiisuck seeec da russ,ec dl othes,(icio)m ple=mg eonottdshsa a rtue s etdo geetxth eenrbn,ai lasln sd
marga(raoispn peo tsboeu dt atesir n)c:or imseDe f sa,(l slhsli effttts)e ;nrnaicsk ePto sgf;o oAaid sn creDaf sogeros oB,dd e cre(assheisf ts
asi ncofmaelDi l nsc,r esahsirefhistt s le;af stP o fo oAdd ecreDaf soeorso B,di ncresahsirefhistt s
3
·Supply
Understsaunpdpilnyg
supp(S)l= y t hqeu anotafig toyot dhs aetl (lfeirarsrmw esi )l alniadnb gtl oper odauncsdee al vtla riporuioscv eaest r i pmeer cieotde,r is paribus
Thlea owfs upply Indivsiudpuapanlmldya rkseutp ply
lawo fs up=p llaya swt atthitanhtgei raspe o sictaiuvsea l indidiuvsaulp =p tlhyse u popafls yi nsgell(elf eirr m)
relatbieotnwspehreii(npcP a e)n qdu antiotafgy o o(dQ ) markseutp= p tlhyse u ppolafilt elhss ee lilanem rasr kfeotub,ny d
supptlhiheei dgt:hh eperr itchheei, g thheqeru anstuiptpytl hieea dd;d uipna glt lhi en disvuipdpuflaoeilrae cpshr iIcnem a.ar wkietttwh o
lowtehprer itchleeo, w tehqreu anstuiptpTylh iee odls.fau wp plsye lmlaerrsksue,pt Sp ml= yoS,Sf e l1l e+or Sf Se l2l.e r
iisl lubsytt rhaet lyesc duu rp,vpw ehiicsh usplwoapridn g.
So fSe l1l er+ S of Sel=l eMra r2Sk uept ply
Whyt hseu ppcluyri vuse p wasrldo ping P S1 p S2 p Sm
Thper iacwteh itchfhei sremil tlgsso odde tertmhrieen veesn ue = ····/·
otfh fei( rtmmh oen iertye cefirvioetmsss a lAesst )hp.er iocafe :/
41·····
gooidn cretahfseie rrsem,c emiovrreees v epnruoed,uo ctfth ieo n
goobde commoerpser ofittahbelrieeit,fis ofn ri eri mnst'et roe sts +
incrtehqaeus aen tthipetryyo dTuhcreee .a fsoogrnr eater 2- 2-/
:
profiittsah abasipt lr iiatcnryede veinnucer fieramassreb e,e tter '
abtlcoe o vtehhrei gchoesortpf sr odutchataritiof snre o m
increasepdr oqduuacnetdi.at sPyT 1 Qhts e,ur pepf1tlo,air needd 0 1 2 Q 0 1 3 Q O 2 Q
vivceer sa.
AtP = m4a,rQ k e=t 2 + 32 ,m= a r5Qk; e =ta t1 P+ =1 = 2
curavneads hiofttfh seu I curve
Movemaelnoatns gu pcpulyrv( ec hainQngs eu pplied) Shioftfa sucpuprl(vyce h ainnsg uep ply)
A moveamleotnnhstgeu pcpulryfv oaegr o ocdab nec ausoendl y As hoitffh tse u pcpulryfv oaegr o ocdab nec ausoendbl yya
byac hanigtneh p er iocfte hg eo oAdc.c ortdoi lntaghow ef chanigtneh n eo n-epd reitcermoifsn uapn(ptslseby ee loAw ).
suppiPlf1y Qt,1,a t n tdh eirasen u pwamrodv em(eb=>n at)i P;fU , righsthwiianfrdtdi acnia ntcersie snau speap nladyl eftswhairfdt
alaln tdh eirasde o wnwmaorvde m(ean=>bt )T .hc eh anigQne indiacd aetcersie snau speTp hlceyh .a niQgnd e u teto h seh iifSnt s
duteot hceh anigPnei c sa lalc ehda nigqneu anstuiptpyl iedi.cs a lalc ehda nignse u pply.
Suppcluyrs vheo wcihnagn ignQes su pplied Suppcluyrvs eh icfthsa:n igsneu sp ply
p p
s
Q Q
Non-pdreitceer moifsn uapn(ptclsay u osfse usp cpulrysv hei fts)
Su Ic haensa ntdh seu I c ursvheii frnte sos n steso evmeanif na ctors:
Chanigcneo ss otfps r odu(cftaicotno rIp frp irociffeca sec st)Co hrasn igane nsin dirtea(=cxt ta oxns pentdboiu nyg gaonsoded rsv ices
opfr odu(cltaiboonr , elnatnrde,p rceiannpeciurtSrea salhs,ie pp,a) ii ndd itrtoeh cgeto lvye rnimafeni n ntd)it;rai exnc ctr eSaf saelsl,s
falslhsil fe;tif fsfta crtiocdree sc reSia nscer,e sahsirefhistt s shilfe;tift asf n i nditrafexac lStil nsc,r esahsiriefh stt s
Chanignte hsne u mboeffr i rimntsh m ea rkItefht ne u mboefr Chaniganes su bids(y= paymbeytn htge o vertnfiomr eminsont r dteor
firiamnm s a rket iSin nccrreeaasseess,i t(fhs nehu imfbtelsro rwcieogrsah tntpsd)r ;ia cniedn, c rseuapspiealf s y u)b;so intd hpyer oduct of
offi rimanms a rfkaelStd l esc,r (esahslieesff tts) afi rimn creSia nscerse,sa hsirefhistt. I s af s ubsUiS,dil s hilfetfst
TechnoclhoagniIgctfeah slei raste e chnoilmopgriocvSae lm Cehnatn,ig nee xsp ectIaffti ireomxnspst e hcfetu tpurrioectf eh periord uct
incr(esahsrieifsgti htsfth )ei;rts ee chnowloorgsi(eclnaeilsn sg tion crtehasesuyep ,lp elsyts h meia nr iktneh tpe r esseotn htce aysn e ll
likteoolc ycS ud re)c re(asshleiesff tts) morietn h feu tauttrh heei gphreirc ef a(=>ls lhSsli efIftfftsi ) re.mx sp ect
threi tcfoea tlhlse,u I m orietn h ree s=>e Snr ti ssehsir fiht ts
Chanignpe rsi ocfre esl agtoeoTdd hsee f foensc utpsdp elpyeo nnwd h etthhreeer l gaotoeaddrs ie n :
(ij)o isnutp= p wlhyetnwo orm orgeo oedxsb ,u tatnesdrk immi lakrd,ee rifvreaosd mi npgrloe(d wuhcmotli elii ktns) o ,pt o sstiopb rloed uce
moroeof n eex,b utwtietrph,ro oudtum coironeftg ho et heexsr k,im mi lItkfh. pe r iocbfeu trtiesQreo sbf,u tptreord iunccerd(e uapsweasr d
movemaelnottnh bgeu tStc eurra vneSd)o sfk immii lnkc r(eSac suerfsvos erk immis lhki rfitgIshtf th p)er. io cbfe u tftaelQrol fbs u,t ter
proddueccerde( adsoewsnm woavredma elnottnh bgeu tStc eurra vneSd)o sfk imimfl ak(l Scl usr fvoserk immis lhki lfetfst ).
(icio)me ptistuipv=pe wl hyeng otowudoss te h sea mree sourocneisao,nnp dsoe txa gtrooeowsntn h sea maeg riclualnitidtuns, ro patol s sible
tpo rodmuocroeeof n wei thporuotd ulceoistfnsh g oe t hIetfrh p.er iocfpe o taitnocerset ahQseo e fps o,t aptrooedsiu nccerde( uapsweasr d
movemaelnottnh pgeo tSac tuor avnetd)h S eo ofn ifoan(lsScl usr fvooern isohnislf etfIsttf h) pe.r iocpfeo tadteocerse tahQseo e pfso ,t atoes
faldlosw nwmaorvde maelnottnh oet aSct uorv aen tdh Seo ofn iionncsr eSac suervfseoo rn isohnisrf hitt .s
4
Markeeqtu ilibrium
E uilibrium
Markeeqtu iliiasbp r oisuiomtbf ia olnab nectewd eeemnaa nndsd u pply, Marekqeut ilibrium
anodc cwuhresqn u andteimtayn ideseq du taoql u anstuiptpyl ied. p
Itnh dei agtrhapimos,io neftq uailwsih tetyrh Deea nSdc urcvreoss s s
each doettheerrem,qi uniilnpigrbc ei,rP ieau,nm ed q uilqiubarni,tu imt y
OeA.te veprryio cteht ehrPa ent, h eirmsea rkdeits equilibrium.
IPf P>e => excessusp =ps luyrp=>l Qud seman<dQ es du pplied.
IPf< P e=>, e xcedsesm a=ns dh or=>t aQgd eeman>dQ e ds upplied.
t/ Inf race oem,p emtairtkwiehvteet,r h eei rnseo i nterwfiettrhhefe no crec es
osfu papnlddye maPna dn,Odw ialllw saeytsat ttlh eee qiuri lviablruieusm.
t/ Itfh eirasse h ortthaeegx ec,de esmsa wniedln ls tuhrPae1tt 1" Po e .
D
t/ Itfh eirasse u rptlheuexs c,se uspswp ilelynl s tuhrPaelt tl Po e .
Chanigmnea sr ket equilibrium
Marekqeuti lciabcnrh iaunomgni eltf yh eirasce h a(nsgheii dnfe tm)a( nDod)ri sn up(pSla)yr, i fsrioanmngoy tf hneoinr- dpertiecrem Ainnya nts.
sucshhl iefattd eosx cdeesmsa onerdx cseuspsrp elsyu,il antn ienmwga rekqeuti librium.
Changmianrkgeeq tu ildiubteroc i huamn igdnee sm and Changeiqnugil idbutreoci huamn igsneu sp ply
p p
Pz- -
p3 S2
P1
P1
Pz
Dz
Q3 Qt Qz Q Q3 Q1 Qz Q
AsD 1f1r"Do 1mt Do=>2 Pe11" a nOde 11" ( tPo2a n0d2 ) Ass 1f1r"So 1mt Soi =>P ellanOde11 ( "t Po2a n0d2 )
Aso iflr Do1mt Do J=>P el aln Ode l ltP o Ja nOdJ AsS iflr So1mt SoJ =>P eft a nOde l lt Po Ja nOdJ
Ther oloeft hper imceec hanism
Resouarlcleo cation
Resouarlcleo c=aa tsisnoiisn ne cirfeisco utrtoch reeo sd uocsfte icoinof oidacsn s de rvices
Scarcchiotaiycn,oed p porctou(snstiep te y21 ) - PPCm odeslc:a rcchiotaiycn,oed p portcuonsitt y
Resouarrscece as(r =lc iem iiqntu eadni trnie tlya tpieoonpn leteeo'ad sns d bread
wanftotsrh etmh)e rseofcoirmeeut simtea skc eh oiocnhe ostw bo e asltl ocate
resoutarovc eorsie ds owuarsctee .
t/ Scarmceiatpnyrs o duccatnionoconcto u urt stihPdePe G( poxi)n.t B2
t/ Ac hoimucsebt em adoenh omwa nrye soutraolc leostc boar teea d
81 ---------------�-----
(symbofloioozdrti) gon u g(n ssy mbodleifzeitnnhsigieas s)c ;h oainces wering
'
thweh attop rodaunchdeo two p rodquucees toirfo ensso aulrlcoec ation. ''
'
t/ Scarmceiattnyhsa a c th ooimfco erb er epardo duncetcieosinsn avrolilelvsyes s '
gupnr odu(catnvidiov cnee r sa).
t/ Evecrhyo iincveo alnov pepso rctou(sn=tit thvyea loutfeh n ee bxets t
alterfnoarteoigrsvo aenc er imfoivcifenrdgao)t m:bo i nvoalniv necsr iena se
PPC
brepardo duocBft2 -iB o1n awnio tphp orctouosnGfti1 -tG y2( gufnosr egone).
Gz guns
Signaalniidnn cge fnutnicvteoi fpo rniscr ee sionau lrlcoec ation Priacsaes igannaidln ceinrntei svoeau lrlcoec ation
Pridceetse rimmni anrekpdel taacs yr urcoiilaanell lorceastoiutnrotg ch ee s
produocsftp ieocgnio fiocTd hsee.c onioismn yi atPti1 aa ln0ld1y . p
SuppDo11sf"er Do1mt 0o(2 d uteoac haniganne o n-dpertiecrem Aittn haen t).
initiPa1lt, h epirreseix ccdee,es sm a(n=0d 2-0 1=>) Pb egtion11 as"c taisn:g
(ias) igtnpoar lo duacncedor nss utmhetarhtsei rasse h orit.ateghr.eei ; sP ing
proviindfeosr matthiseoh no ratpbarogouedt u atcnoced or nss uamnedrs;
(iaini) n cetnopt riovdeu tcope rrosd muocrQee, l eadtaionn ug p ward
movemaelnottnh Sgec ur(v0se u pplied incorffei argsmreses'a) t ebre cause
willianngadnb eitslposi r toyda usPc 1eal n"ad;ni ncetnotc iovnes utmboe urys D2
leQsts h a0n2l ,e adtaionn ug p wamrodv emaelnottnh Dge2 c ur(v0de e manded
decrebaesceasou)cfs oen sulmoewwreisr'l lianngadnb eitslbosiu tayysP 11".
t/ Thnee mwa rekqeuti lsiebtratitplu remiPs c2a e nq du anOtJi.t y
Q1 QJ Qz Q
t/ Resourrecael lohcaoasct ciuoarnssr oemdre,e souwrecrteeas ko euontf
roduocoftt ihocenor da snb dr ohuit ntroo duoctfth iiooson Od J 0>1 .
5