Economic Problem: The fundamental fact of scarcity: Limited resources and unlimited demands on these resources, choice must be made: Opportunity cost, what, how, who; Production possibilities frontier: point on the curve full employment of resources; point inside the curve unemployment resources exist; point beyond the curve impossible production at present; Marginal utility bianjixiaoyong is the additional satisfaction; Indifference analysis: The higher curve, the more utility; the lower curve, the less utility. Market: hudongxing tongyi; Demand and supply zaitongyigezuobiaozhoushang yougongtongdejunhengdian; Demand curve: price falls, qd increases; p rises, qd decreases; Non-price factors: price of related goods, population, advertising, personal tastes, seasonal factors, real incomes; supply curve hedemandyiyang. Equilibrium price and quantity balanced. Junhengdianbianhuadesangebuzhou: shisupplycurvehaishidemandcurveorboth,decidexiangzuohaishixiangyou,kanjunhenghoudePheQ.
Price elasticity of demand: how a good responds to its change, percentage change in qd given a percent change; Elasticity demand curves tend to be horizontal, inelasticity demand curves tend to be vertical.
Elasticity and total revenue: total revenue is the amount paid by buyers and received by sellers of a good; computed as the price of the good times the quantity sold. TR equals P multiply Q.
Inelastic demand curve: An increase in price leads to a decrease in quantity that is proportionately smaller. Thus, total revenue increases; a decrease in price leads…