1.1. Competitive markets: Demand and Supply

Markets

Product Market

Factor market

Financial markets

Demand

Law of demand

The relationship between an individual consumer's demand and market demand

The demand curve

The demand curve

Non-price determinants of demand (factors which change demand/ shift the curve)

Movement along the demand curve

Reasons for movement along the demand curve

Shift of the demand curve

Reasons for shift of the demand curve

Movement along the curve vs. shift of the curve

The demand function (equation)

Demand curve from linear equation

Slope of the demand curve as the slope of the demand function. (-b is the coefficient of P)

Why does changes in 'a' lead to a shift of the demand curve?

Why does a change in 'b' affect the steepness of the demand curve?

Supply

Law of supply

The relationship between an individual producer supply and market supply

The supply curve

The supply curve

Shift of the supply curve

Reasons for shift of the supply curve

Non-price determinants of supply

Movement along the supply curve

Reasons for movement along the supply curve

Shift of the supply curve vs. movement along the supply curve

The supply function(equation)

Supply curve from linear eqaution

slope of the supply curve as a slope of the supply function (d is the coefficient of P)

Why does 'c' lead to a shift of the supply curve?

Why does 'd' affect the steepness of the curve? (slope)

Market equilibrium

Market equilibrium

Excess demand and supply

Changes in demand and supply affecting equilibrium

Changes in equilibrium price and quantity following changes in demand and supply

Equilibrium price and quantity equation (Qd=Qs)

Demand and supply equations forming equilibrium (point of intersection)

Excess supply: Qd<Qs
Excess demand: Qs<Qd

Price mechanism

Why does scarcity necessitate choices?

Why does choice result in an opportunity cost?

How is price a signalling and incentive function? (Invisible hand-Adam Smith)

Consumer surplus

Consumer surplus(graphed)

Producer surplus

Producer surplus (graph)

Community surplus

Allocative efficiency from society's point of view

Allocative efficiency (illustrated)