Introduction to Economics

Explore the buyers side of the market and the demand curve, showing how price and quantity demanded move inversely under the law of demand.

Distinguish between a change in quantity demanded, driven by price, and a change in demand, caused by factors such as income, tastes, and related prices in the cappuccino market.

Explore how demand shifts with income, tastes, prices of substitutes and complements, number of buyers, and future expectations, and see how these factors move the demand curve.

Define supply as a schedule or curve of quantities producers are willing to sell at various prices, illustrating the positive relationship and the law of supply with a cappuccino example.

Differentiate change in quantity supplied from change in supply: price changes move quantity supplied along supply curve, while change in supply shifts curve due to price, technology, and hours.

Explore how resource prices, technology, hours worked, and producer expectations shape supply, shifting the supply curve left or right in response to costs and future prices.

Explore how market equilibrium determines the price and quantity where demand equals supply, and examine shortages and surpluses using demand and supply curves and real-life examples.

Learn how market equilibrium sets the price where quantity demanded equals quantity supplied. Observe how surplus and shortage trigger self-adjustment toward market clearing with real-world examples.

Explain how shifts in demand affect market equilibrium, showing that increases raise price and quantity while decreases lower them, with organic food and cigarettes as examples.

Explore how technology improvements shift the cappuccino supply curve right, lowering price and increasing equilibrium quantity, while higher coffee bean costs shift supply left, raising price and reducing equilibrium quantity.

Identify how consumer surplus measures buyers' extra value when willingness to pay exceeds price, including how the blue shaded area represents total consumer surplus.

Illustrates consumer surplus as the area between the price paid by consumers and the price received by sellers, under perfect competition, and shows how a tax wedge reduces surplus.

Examine how producer surplus arises when price exceeds cost, using babysitting examples to show individual and market-wide benefits and the impact of sellers in the market.

Explore how producer surplus is measured graphically, showing how price paid by buyers and price received by sellers shift under no tax, taxes, and imports, including government revenue.

Explain how under perfect competition the market achieves allocative efficiency. Show productive efficiency by producing at the lowest cost and maximizing the economic pie, i.e., total surplus.

Explore how price and quantity split the economic pie between buyers and sellers, shaping consumer and producer surplus. Recognize how market underperformance creates deadweight loss and reduces welfare.

Externalities occur when consumption benefits bystanders or production imposes costs on others. The lecture explains private versus social demand and supply and how scholarships can reach the social optimum.

Explain tax incidence: whether the government taxes buyers or sellers does not change the net price; the buyer's payment and seller's receipt shift with the tax.

Learn how tax incidence works on the supply curve, showing that taxing buyers or sellers yields the same outcome: higher price to buyers, lower price to sellers, and reduced quantity.

Analyze how a tax reshapes welfare by tracing shifts in consumer surplus and producer surplus, the buyer-seller price gap, and the resulting tax revenue to the government.