Post Lesson 5/Pre Lesson 6

First things first,

HW for next time, answers from this time, and Reflection paper rubric are found here: \\AFAEDUFS10\cadet-data\DF\DFEG\Economics\Econ201\Fall 2013\Balser

Today in class we talked about Marginal Value and Demand, Marginal Cost and Supply, the relationship between each of them and price, consumer and producer surplus (or profit), and we began to talk about what things might shift supply and demand. In particular:

• Marginal Value/Marginal Cost have the root question of How many do I have/have I produced? that is these two are a function of quantity that tells us a price we are willing to pay/receive to obtain/make the next unit
• Demand/Supply share the root question How much will it cost/can I get paid for it? that is demand/supply are a funciton of price that tells us how many we will buy/sell at any price
• Graphically MV=D and MC=S
• When prices get screwy we end up with "lost transactions" which result in less total surplus for the whole economy.
• For supply or demand to change (and not just move along the curve) something has to happen which makes us want to buy (or sell) more of that product at every price.
• As an example for demand we talked about the effect of an increase in income. At any price for snickers, if i have more income i'm going to buy more snickers shifting demand to the right.
• For supply we used the example of a new technology. If the new technology makes it cheaper to produce a good then for any price I get paid I can make more of that good.

I would say todays class was a check minus. It was much harder to pull information out of you all today or to get you to interact especially when it came supply and demand time.