|Posted on April 14, 2014 at 8:00 PM||comments (0)|
Marginal revenue product is equal to the demand for an economic resource. The shift factors of the downward sloping marginal revenue product curve are:
1. Product price and demand - If there is an increase in product demand, then there is more demand for the economic inputs used to make the product.
2. Productivity of the resource - If a resource is more productive, the firm wants to hire more (not less) of those resources to maximize profit.
3. Prices of substitute resources - If the price of a substitute resource decreases, then there will be less demand for the other resource.
AP Microeconomics Unit 3 Resource Markets
|Posted on April 14, 2014 at 6:05 PM||comments (0)|
Before the AP Microeconomics exam in May, you should have mastered the following economic models and graphs:
1. Supply and Demand
2. Perfectly Competitive Market and Firm
4. Monopolistic Competition
5. Perfectly Competitive Resource Market and Firm
6. Monopsonistic Resource Market
7. Positive Externality
8. Negative Externality
Watch the video below to see all of these graphs and more. Be sure to pause the video to take in the main ideas of each model.
AP Microeconomics Review
|Posted on April 14, 2014 at 5:55 PM||comments (0)|
To illustrate a monopoly with a short run economic profit, the demand curve must exceed the average total cost curve at the marginal revenue equals marginal cost level of output.
The No Bull Review video below shows you exactly how to do it!
AP Microeconomics Unit 2 Product Markets
|Posted on April 14, 2014 at 5:45 PM||comments (0)|
A consumer surplus exists when the market price that a consumer pays for a product is less than what he or she is willing to pay. Suppose you are willing to pay $15 for a movie ticket and you end up paying $10. You have a consumer surplus of $5. In a supply and demand graph, the area of market consumer surplus is above the equilibrium price and under the demand curve.
This No Bull Review video explains how to find consumer surplus on a graph
AP Microeconomics Unit 1 Basic Economic Concepts