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RESOURCE QUALITY, AGGREGATE SUPPLY DETERMINANT: One of three categories of aggregate supply determinants assumed constant when the short-run or long-run aggregate supply curves are constructed, and which shifts both aggregate supply curves when it changes. An increase in a resource quality causes an increase (rightward shift) of both aggregate supply curves. A decrease in a resource quality causes a decrease (leftward shift) of both aggregate supply curves. The other two categories of aggregate supply determinants are resource quantity and resource price. Specific determinants falling into this general category include education and technology. Anything affecting the quality of labor, capital, land, and entrepreneurship is also included.
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Lesson Contents
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Unit 1: Adjustments |
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Unit 2: Determinants |
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Unit 3: Single Shifts |
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Unit 4: Double Shifts |
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Unit 5: Cause and Effect | |
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Market Shocks
Our goal in this lesson is to investigate disruptions of the market. Specifically, we want to use the market model previously developed, to examine the why and how of market shocks. What causes market shocks? How do markets react when shocked? If the truth be known, markets in the real world don't remain at the same locations for very long. They move. They adjust. Prices change. Quantities change. We can understand these real world market changes, by analyzing what happens to market model when it's shocked. - The first unit, Adjustments, lays the foundation for analyzing market shocks with an overview of the adjustment process and the role played by the ceteris paribus assumption.
- In the second unit, Determinants, we review the five determinants of demand and five determinants of supply that cause market disruptions.
- We then move into the actual adjustment process in the third unit, Single Shifts, examining four disruptions that involve a shift in either the demand or supply curve.
- The fourth unit, Double Shifts, builds on these four basic shifts to exam four complex shocks that have simultaneous shifts in both the demand and supply curves.
- We end this lesson in the fifth unit, Cause and Effect, by relating market shocks to the fundamental notion of cause and effect inherent in the study of economic science.
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ALLOCATIVE EFFICIENCY Obtaining the most consumer satisfaction from available resources. In other words, resources are allocated in such a way that consumer satisfaction is at its highest possible level. This is also termed either efficiency or economic efficiency.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store hoping to buy either a wall poster commemorating the 2000 Olympics or a flower arrangement with a lot of roses for your grandmother. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
Your Complete Scope
This isn't me! What am I?
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Natural gas has no odor. The smell is added artificially so that leaks can be detected.
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"There's only one corner of the universe you can be certain of improving and that's your own self. " -- Aldous Huxley, writer
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TFP
otal Factor Productivity
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