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Principles of Economics chapters Principles of Principles of Microeconomics Macroeconomics
chapters chapters1. Ten Principles of Economics 1 12. Thinking Like an Economist 2 23. Interdependence and the Gains from Trade 3 34. The Market Forces of Supply and Demand 4 45. Elasticity and Applications 5 56. Supply, Demand, and Government Policies 6 67. Consumers, Producers and the Efficiency of Markets 7 78. Application: The Costs of Taxation 8 89. Application: International Trade 9 910. Externalities 10 --11. Goods and Common Resources 11 --12. The Tax System 12 --13. The Costs of Production 13 --14. The Competitive Firm 14 --15. Monopoly 15 --16. Oligopoly 16 --17. Monopolistic Competition 17 --18. The Markets for the Factors of Production 18 --19. Earnings and Discrimination 19 --20. The Distribution of Income 20 --21. The Theory of Consumer Choice 21 --22. Measuring a Nation's Wealth -- 1023. Measuring the Cost of Living -- 1124. Production and Growth -- 1225. Financial Markets: Saving, Investment, -- 13 and Interest Rates --26. Unemployment -- 1427. The Monetary System -- 1528. Inflation: Its Causes and Costs -- 1629. Open-Economy Macroeconomics: Basic Concepts -- 1730. A Macroeconomic Theory of the Open Economy -- 1831. Aggregate Demand and Aggregate Supply -- 1932. Monetary and Fiscal Policy Determinants of -- 20 Aggregate Demand33. The Short-Run Tradeoff between Inflation -- 21 andUnemployment34. Five Debates over Macroeconomic Policy -- 22
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1-6
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Q u a n
t i t y o
f M i l k P r o
d u c e
d
PPF 1
PPF 2
Quantity of Cookies Produced
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c. $7a. $1
c. $7a. $1
b. $4.50d. $10,000
b. $4.50d. $10,000
a. Quart of milkc. Movie ticket
a. Quart of milkc. Movie ticket
d. Acmes capitalb. One hour of work
d. Acmes capitalb. One hour of workMarkets for
Factors of Production
Markets forGoods and Services
Firms Households
C l e a n l i n e s s o
f E n v
i r o n m e n
t
PPF 1
PPF 2
Income
2-3
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2-4
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2-5
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2-6
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3-1
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E c o n o m
i c s
P a g e s
Sociology Pages
100
250
3-2
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C a r s
( m i l l i o n s
)
Grain (millions of tons)
400
1000500
U.S.
Japan
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3-4
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3-6
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3-7
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4-1
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P r i c e o
f P i z z a
Quantity of Pizza
S
D1D2
4-2
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P r i c e o
f O r a n g e s
Quantity of Oranges
D
S 1
S 2
P r i c e o
f C a r i
b b e a n
H o
t e l R o o m s
Quantity of Caribbean Hotel Rooms
S
D1
D2
4-3
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P r i c e o
f U s e
d C a
d i l l a c s
Quantity of Used Cadillacs
S 2
S 1
D1
D2
P r i c e o
f G a s o l i n e
Quantity of Gasoline
S 1
S 2
4-4
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P r i c e o
f N o
t e b o o
k s
Quantity of Notebooks
S
D1
D2
P r i c e o
f N o
t e b o o
k s
Quantity of Notebooks
S
D1
D2
4-5
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P r i c e o
f S w e a
t s h i r t s
Quantity of Sweatshirts
S
D1D2
P r i c e o
f S w e a
t s h i r t s
Quantity of Sweatshirts
S
D1D2
4-7
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P r i c e o
f S w e a
t s h i r t s
Quantity of Sweatshirts
D
S 1S 2
P r i c e o
f B a
b y s
i t t i n g
S e r v
i c e s
Quantity of Babysitting Services
S
D1 D2
4-8
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P r i c e o
f B a
b y s
i t t i n g
S e r v
i c e s
Quantity of Babysitting Services
D
S1 S 2
P r i c e o
f C i g a r s
Quantity of Cigars
S
D1D2
4-9
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P r i c e o
f P i z z a
Quantity of Pizza
S
D1
D2
4-10
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P r i c e o
f C o m p u
t e r s
Quantity of Computers
D
S 1S 2
P r i c e o
f S o
f t w a r e
Quantity of Software
S
D1D2
4-11
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P r i c e o
f B a g e
l s
Quantity of Bagels
D
S 1 S 2
P r i c e o
f C r e a m
C h e e s e
Quantity of Cream Cheese
S
D1
D2
4-12
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P r i c e o
f C r e a m
C h e e s e
Quantity of Cream Cheese
D
S 1S 2
4-13
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P r i c e o
f B a g e l s
Quantity of Bagels
S
D1D2
P r i c e o
f B a s
k e t b a
l l T i c k e
t s
Quantity of Basketball Tickets
S
D
$8
8,000
4-14
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P r i c e o
f C h a m p a g n e
Quantity of Champagne
S
D1D2
4-15
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D
Q
S 1
S 2P
D
Q
S 1 S 2
P
DQ
S 1
S 2P
DQ
S 1 S 2
P
D
Q
S 1S 2P
D
Q
S 1 S 2
P
DQ
S 1S 2P
DQ
S 1S 2
P
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P r i c e
Quantity
S
D
Q
PArea of rectangle= total spending by consumers= total revenue received by producers= P x Q
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6-1
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P r i c e o f
B e e r
Quantity of Beer
Supply
Demand
Q1
P 1
P r i c e o f
B e e r
Quantity of Beer
Supply
Demand
Q1Q2
P 1
P 2
P 2 $2
6-2
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P r i c e o f
C h e e s e
Quantity of Cheese
Supply
Demand
Q1Q2 Q 3
P 1
P f
6-3
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P r i c e o f
G a s o l
i n e
Quantity of Gasoline
S 1
S 2
D2D1
Q1Q2
P 1P 2 50
P 2
6-4
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P r i c e o
f G a s o
l i n e
Quantity of Gasoline
Supply
tax
tax
D2
D1
Q1 Q 2
W a g e
Quantity of Labor
Supply
Demand
unemployment
D C
BA
Q1 Q3Q2
w1wm
6-5
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P r i c e o f
G u n s
Quantity of Guns
Supply
D2
D1
Q1Q2
P 1P 2 tax
P 2
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P r i c e o f
G u n s
Quantity of Guns
Demand
S 2
S 1
Q1Q2
P 1P 2 tax
P 2
P r i c e o
f G u n s
Quantity of Guns
Demand
Supply
Q1Q2 Q 3
P 1
P f
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P r i c e o f I c e - C r e a m
C o n e s
Quantity of Ice-Cream Cones
Supply
D2
D1
Q1 Q2
P 1P D
P s
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P r i c e
Equilibrium quantityQuantity
Equilibriumprice
Supply
Demand
Producersurplus
Consumersurplus
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P r i c e
o f L e m o n s
Quantity of Lemons
Demand
S 2S 1
P 1
P 2A
B C
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P r i c e o f
F l o u r
Quantity of Flour
Supply
D2D1
P 1P 2
DE F
7-4
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P r i c e o f W
a t e r
Quantity of Water
A
B
1
$7
$6
$5
$4
$3
$2
$1
2 3 4
7-5
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P r i c e o f
W a t e r
Quantity of Water
A
B
1
$7$6$5$4$3$2$1
2 3 4
7-6
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P r i c e o f
C o m p u t e r s
Quantity of Computers
Demand
S 2S 1
P 1
Q1 Q2
P 2D
GCB
A
E F
7-7
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P r i c e o
f C o m p u
t e r s
Quantity of Computers
S 2S 1
Demand
A
B
7-8
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P r i c e o
f H a i r c u t
Quantity of Haircuts
A
B
C
D
1
$8$7$6$5$4$3$2$1
2 3 4
Sally
Phil
Geraldo
Oprah
P r i c e
Quantity
Supply
DemandQ1Q2
A
7-9
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P r i c e
Quantity
Supply
Demand
Q1 Q 3
B
P r i c e o
f M e d
i c a l
P r o c e
d u r e
Quantity of Medical Procedures
Supply
DemandQ1 Q2
$100
$20
7-10
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P r i c e o f
W a t e r
Quantity of Water
Demand
Shortage
S 2
S 1
Q1Q3
P 1
P 2
Q2
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7-12
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P r i c e
Quantity
Supply
Demand
Q1Q2
P1P s
P BA
B
E
C
DF
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P r i c e o
f P i z z a
Quantity of Pizza
Supply
Demand
Q1Q2
P 1P s
P BA
B
E
C
D
F
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8-3
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P r i c e o
f R u
b b e r
B a n
d s
Quantity of Rubber Bands
Supply
Demand
A B
C D
P r i c e o
f R u
b b e r
B a n
d s
Quantity of Rubber Bands
Supply
Demand
AB
C D
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8-5
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P r i c e o
f S o c
k s
Quantity of Socks
Supply
Demand
Q1Q2
P 1P s
P BA
B E
C
D F
8-6
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P r i c e o
f C a r s
Quantity of Cars
Supply
Demand
Q1Q2
P B2
P B1
P S1
P S2
A
B
E
G
C
D
F
H
8-7
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P r i c e
Quantity
Supply
Demand
Q1 Q 2
P 1
P s
P B
AB
E H
I
C D
F G
8-8
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T a x
R e v e n u e
0 300T
8-9
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P r i c e
Quantity
Supply
Demand
200200
100 +
base = Theight = 2T3
2T3
2T3
100 100
T3
D e a
d w e
i g h t L o s s
0 300T
45,000
8-10
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P
r i c e
Quantity
Domesticsupply
Domesticdemand
Worldprice
A
BC
D
Imports
Pricebeforetrade
Priceaftertrade
9-1
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P r i c e o
f O r a n g e s
Quantity of Oranges
Supply
Demand
Q1 QoQs
P 1P w
A
B EC
D
9-2
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P r i c e o
f W i n e
Quantity of Wine
Supply
Demand
P 1
P 2
A
B EC
D
9-3
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p A
Country A Country BQA Q B
P 1
P w p B
P 2
S A
S B
DA DB
E
GCD F
H J
I
P r i c e
Quantity
Supply
Demand
P wP 1
P w+ t
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P r i c e o
f S u g a r
Quantity of Sugar
S + quota
S
A
C
G
D E E
B
F
Demand
P w
P q
Q1s
Q1s+ quota
Q2s Q1DQ2D
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P r i c e o f
S t e e l
Quantity of Steel
Supply
ACG
D
E
B
F
Demand
P w
P w+ s
Q1s Q2sQ1D
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P r i c e
QuantityQoptimum Qmarket
Social cost
Supply(private cost)
Demand(private value)
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P r i c e o f
F i r e E x t i n g u
i s h e r s
Quantity of Fire ExtinguishersQoptimumQmarket
Demand
Supply
(social cost)
Social value
10-3
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P r i c e o f
S t u d d e d S n o w
T i r e s
Quantity of Studded Snow TiresQoptimum Qmarket
Demand
Supply
Social value
P r i c e o
f S t u d d e
d S n o w
T i r e s
Quantity of Studded Snow TiresQoptimum Qmarket
Demand
Supply
Social value
10-4
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P r i c e o f
A l u m
i n u m
C a n s
Quantity of Aluminum CansQoptimum Qmarket
Demand
Supply
Social cost
Social value
P r i c e o
f A l c o
h o
l
Quantity of AlcoholQoptimum Qmarket
Demand
Supply(social cost)
Social value
C
AB
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10-8
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11-2
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C o s t s
Quantity
Averagetotal cost
Marginalcost
13-2
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Q u a n t
i t y o f
F i s h
Hours Spent Fishing
30
25
20
15
10
5
00 2 41 53
13-3
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T o t a l C o s t o f
F i s h i n g
Quantity of Fish
35
30
2520
15
10
5
00 20 4010 30
13-4
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13-6
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C o s
t s
Quantity of Juice
40
35
30
25
20
15
10
5
00
Average variable cost
Average total cost
Marginal cost
1 42 53 6
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P r i c e ,
C o s
t sMarginal cost
Average total cost
Average variable cost
Q*
Quantity
P *
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P r i c e ,
C o s
t s , R
e v e n u e
QuantityQuantity
IndustryFirm
Marginalcost Average
total cost
Q2 Q3q2 Q1q1
P 1
D2
S 1S 3
D1
P 2
P r i c e
14-4
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P r i c e ,
C o s
t s
QuantityQuantity
IndustryFirm
Q2Q3q2 q3 Q1q1
P 1
S 1S 2
S 3MC2MC1ATC2ATC1
P 2P 3 P
r i c e
Demand
P r i c e ,
C o s
t s
Quantityimports
Quantity
IndustryFirm
q2 Q1q1
Supply
Demand
$30$25
P r i c e
Marginalcost
Averagetotal cost
14-5
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P r i c e ,
C o s
t s
Quantity of PretzelsQuantity of Pretzels
IndustryFirm
q2 800q 2 1000q 1q1
S 2S 1
Demand
P 2ATC2
P 1 P r i c e
Marginalcost
Averagetotal cost
14-6
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P r i c e , C
o s t s
QuantityQuantity
IndustryFirm
q2 Q1 Q2q1
D2D1
Supply
P 2
P 1 P r i c e
Marginalcost Average
total cost
P r i c e ,
C o s
t s
QuantityQuantity
Other refinerCalifornia refiner
Q0Qc
P *
ATCc
MarginalcostMarginal
cost Averagetotal cost
Averagetotal cost
P r i c e ,
C o s
t s
14-7
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P r i c e ,
C o s
t , R e v e n u e
Marginal cost
Deadweightloss
Demand
Marginal revenue
QcQm
P m
Quantity
15-1
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P r i c e ,
C o s
t , R e v e n u e
Marginalcost
Deadweightloss
Demand
Averagetotal cost
QMCQATC
P ATCP MC
Quantity
15-3
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P r i c e ,
C o s
t , R e v e n u e
Marginal costAverage cost
Q1 Q2
D2
D1MR2
MR1
P 1
AC2AC1
P 2
Quantity of Bottled Water
P r i c e ,
C o s
t , R e v e n u e
Marginalcost
Demand
QC
P C
Quantity of Groceries
A
15-4
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P r i c e ,
C o s
t , R e v e n u e
Marginalcost
Demand
QCQM
P C
P M
Quantity of Groceries
CB
DE
F
Marginalrevenue
15-5
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P r i c e
Demand
800
8
Quantity of Crossings
Area= x 8 x 800= 3,200
12
P r i c e ,
C o s
t , R e v e n u e
Marginal cost
Average cost
Demand
Q1
AC1
P 1
Quantity of Drug Bottles
Marginal revenue
15-7
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P r i c e ,
C o s
t , R e v e n u e
Marginal cost + tax
Average cost + tax
Demand
Q2
AC2
P 2
Marginal revenue
15-8
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P r i c e , C o s
t , R e v e n u e Marginal cost
Average cost
Demand
QM QCQL
P LP C
P M
Quantity of DrinksMarginal revenue
P r i c e ,
C o s
t , R e v e n u e Marginal
cost
Demand
QCQM
P M
Quantity of Chips
C
BAD
E
Marginalrevenue
15-9
-
8/10/2019 Mankiw Solution
127/259
P r i c e ,
C o s t ,
R e v e n u e
Marginal cost= Average cost
Demand
QCQM
P M
Quantity
XX
Y Y
Z
Marginalrevenue
15-10
-
8/10/2019 Mankiw Solution
128/259
15-11
-
8/10/2019 Mankiw Solution
129/259
16-1
-
8/10/2019 Mankiw Solution
130/259
16-2
-
8/10/2019 Mankiw Solution
131/259
16-3
-
8/10/2019 Mankiw Solution
132/259
16-4
-
8/10/2019 Mankiw Solution
133/259
16-5
-
8/10/2019 Mankiw Solution
134/259
16-6
-
8/10/2019 Mankiw Solution
135/259
P r i c e 1
C o s
t 1 R e v e n u e
QuantityQ
Demand
Averagetotal cost
Marginal cost
P
Marginal revenue
17-1
-
8/10/2019 Mankiw Solution
136/259
17-2
-
8/10/2019 Mankiw Solution
137/259
P r i c e 1
C o s
t 1 R e v e n u e
Quantity of Sparkle ToothpasteQM QC
Demand
Averagetotal cost
C
BA
Marginalcost
P M
Marginal revenue
17-3
-
8/10/2019 Mankiw Solution
138/259
17-4
-
8/10/2019 Mankiw Solution
139/259
P r i c e 1
C o s
t 1 R e v e n u e
QuantityQM
Demand
Marginal cost
P M
MCM
Marginal revenue
17-5
-
8/10/2019 Mankiw Solution
140/259
P r i c e 1
C o s
t 1 R e v e n u e
Quantity of TylenolQT
Demand
Marginal cost
P T
MCT
Marginal revenue
17-6
-
8/10/2019 Mankiw Solution
141/259
P r i c e 1
C o s
t 1 R e v e n u e
Quantity of AcetaminophenQg
Marginal cost
Demand =
Marginalrevenue
P g = MCg
17-7
-
8/10/2019 Mankiw Solution
142/259
P r i c e o f
A p p
l e s
Quantity of ApplesQ1 Q2
D2D1
Supply
P 2P 1
18-1
-
8/10/2019 Mankiw Solution
143/259
-
8/10/2019 Mankiw Solution
144/259
W a g e
Quantity of LaborL1 L2
D2
D1
Supply
w2
w1
W a g e
Quantity of LaborL2L1
S 1
Demand
S 2
w1
w2
18-3
-
8/10/2019 Mankiw Solution
145/259
W a g e
Quantity of LaborL1 L2
D1
Supply
w2
w1
D2
18-4
-
8/10/2019 Mankiw Solution
146/259
R e n
t a l P r i c e o f
C a p
i t a l
Quantity of CapitalK2K1
S 1
Demand
S 2
r1
r2
W a g e
Quantity of LaborL1 L2
D1
Supply
w2w1
D2
18-5
-
8/10/2019 Mankiw Solution
147/259
W a g e ,
V a l u e o f
M a r g i n a
l P r o
d u c t o f L a b o r
Quantity of Labor
Wage
VMPL10
1 2 3 4 5 6
20
30
40
50
60
70
18-6
-
8/10/2019 Mankiw Solution
148/259
W a g e
Quantity of LaborL2 L1
D2
Supply
w1
w2w1 $3 D1
18-7
-
8/10/2019 Mankiw Solution
149/259
W a g e
Quantity of LaborL1 L2
D2
S 2
S 1
w1
w2w1 $3
D1
18-8
-
8/10/2019 Mankiw Solution
150/259
18-9
-
8/10/2019 Mankiw Solution
151/259
-
8/10/2019 Mankiw Solution
152/259
19-2
-
8/10/2019 Mankiw Solution
153/259
W a g e
QuantityQuantity
Skilled LaborUnskilled Labor
Demand Demand
W a g e
S 1
S 1
S 2
S 2
19-3
-
8/10/2019 Mankiw Solution
154/259
-
8/10/2019 Mankiw Solution
155/259
19-5
-
8/10/2019 Mankiw Solution
156/259
20-1
-
8/10/2019 Mankiw Solution
157/259
20-2
-
8/10/2019 Mankiw Solution
158/259
20-3
-
8/10/2019 Mankiw Solution
159/259
20-4
-
8/10/2019 Mankiw Solution
160/259
W i n e
Cheese500
1,000
21-1
-
8/10/2019 Mankiw Solution
161/259
W i n e
Cheesec
1
MRSw
W i n e
Cheesec* 500
1,000
w*
21-2
-
8/10/2019 Mankiw Solution
162/259
W i n e
Cheesec1 c2
BC2BC1
w2w1
W i n e
Cheesec2 c1
BC2BC1
w2
w1
21-3
-
8/10/2019 Mankiw Solution
163/259
W i n e
CheeseC3 C1C2 500
1,000
w2w1
w3
BC2 BC3
B
A
C
BC1300
21-4
-
8/10/2019 Mankiw Solution
164/259
C r o i s s a n t s
Coffee
BC2 BC1
I2
I1
B
A
C r o
i s s a n
t s
Coffee
BC2 BC1
I2
I1
AB
21-5
-
8/10/2019 Mankiw Solution
165/259
-
8/10/2019 Mankiw Solution
166/259
-
8/10/2019 Mankiw Solution
167/259
C o n s u m
p t i o n
Leisure
BC1
BC2
C o n s u m p t
i o n
Leisure
BC1
BC2
21-8
-
8/10/2019 Mankiw Solution
168/259
C o n s u m
p t i o n
Leisure
BC3
BC2
$1,000
$800
$600
BC1
L8 L6 L10 100
C o n s u m p t
i o n
Leisure
21-9
-
8/10/2019 Mankiw Solution
169/259
C o n s u m p t
i o n
Leisure
BC2
BC1
L1 L2
C o n s u m p t
i o n
Leisure
BC2
BC1
L2 L1
21-10
-
8/10/2019 Mankiw Solution
170/259
C o n s u m p t i o n
W h e n
O l d
Consumption When Young
BC242
31.5
BC1
30 40
21-11
-
8/10/2019 Mankiw Solution
171/259
C o n s u m p t
i o n
W h e n
O l d
Consumption When Young
32.4
31.5
30
E d u c a
t i o n
S p e n d
i n g
Other Spending
15
5
10BC2 BC1
15
21-12
-
8/10/2019 Mankiw Solution
172/259
E d u c a
t i o n
S p e n d
i n g
Other Spending
15
5
10 15
E d u c a
t i o n
S p e n d
i n g
Other Spending
15
I2 I1
5
10 15
21-13
-
8/10/2019 Mankiw Solution
173/259
C o n s u m p t
i o n
Leisure
L1 L2
A
Lmax
21-14
-
8/10/2019 Mankiw Solution
174/259
C o n s u m p t
i o n
W h e n
O l d
Consumption When Young
BC2
BC1
21-15
-
8/10/2019 Mankiw Solution
175/259
22/10-1
-
8/10/2019 Mankiw Solution
176/259
22/10-2
-
8/10/2019 Mankiw Solution
177/259
22/10-3
-
8/10/2019 Mankiw Solution
178/259
23/11-1
-
8/10/2019 Mankiw Solution
179/259
-
8/10/2019 Mankiw Solution
180/259
23/11-3
-
8/10/2019 Mankiw Solution
181/259
23/11-4
-
8/10/2019 Mankiw Solution
182/259
24/12-1
-
8/10/2019 Mankiw Solution
183/259
-
8/10/2019 Mankiw Solution
184/259
24/12-3
-
8/10/2019 Mankiw Solution
185/259
24/12-4
-
8/10/2019 Mankiw Solution
186/259
25/13-1
-
8/10/2019 Mankiw Solution
187/259
25/13-2
-
8/10/2019 Mankiw Solution
188/259
-
8/10/2019 Mankiw Solution
189/259
I n t e r e s
t R a t e
Loanable Funds
Demand
S 1
S 2
L1L1 20 L2
i1
i2
25/13-4
-
8/10/2019 Mankiw Solution
190/259
i
L
Inelastic Supply
L2
S 2 S 1
L1
D D
i2
i1
i
L
Elastic Supply
L2
S 2 S 1
L1
i2i1
i
L
Inelastic Demand
L2
S 2 S 1
L1D
D
i2
i1
i
L
Elastic Demand
L2
S 2S 1
L1
i2i1
25/13-5
-
8/10/2019 Mankiw Solution
191/259
I n t e r e s t
R a t e
Loanable Funds
Supply
D1D2
L1L2
i1
i2
I n t e r e s t
R a t e
Loanable Funds
Supply
D1D2
L1L2
i1
i2
25/13-6
-
8/10/2019 Mankiw Solution
192/259
25/13-7
-
8/10/2019 Mankiw Solution
193/259
26/14-1
-
8/10/2019 Mankiw Solution
194/259
26/14-2
-
8/10/2019 Mankiw Solution
195/259
W a g e
Quantity of Labor
Demand
Supply
L1S L2SL1DL2D
m1m2
26/14-3
-
8/10/2019 Mankiw Solution
196/259
w
QL
Unionized Market
U2D U2SU1
S
D D
w2Nw1N
ww2u
w1u
QL
Nonunionized Market
N2
S 2
S 1
N1
26/14-4
-
8/10/2019 Mankiw Solution
197/259
26/14-5
-
8/10/2019 Mankiw Solution
198/259
W a g e
Quantity of Labor
S 1
D2
D1
S 2
L1
w1
w1 $4
26/14-6
-
8/10/2019 Mankiw Solution
199/259
W a g e
Quantity of Labor
S 1
S 2
D2D1
L1DL2D L1S L2S
m
W a g e
Quantity of Labor
D2
D1
L2 L1
w1
w2
w1 $4
Supply
26/14-7
-
8/10/2019 Mankiw Solution
200/259
26/14-8
-
8/10/2019 Mankiw Solution
201/259
27/15-1
-
8/10/2019 Mankiw Solution
202/259
27/15-2
-
8/10/2019 Mankiw Solution
203/259
-
8/10/2019 Mankiw Solution
204/259
27/15-4
-
8/10/2019 Mankiw Solution
205/259
27/15-5
-
8/10/2019 Mankiw Solution
206/259
27/15-6
-
8/10/2019 Mankiw Solution
207/259
28/16-1
-
8/10/2019 Mankiw Solution
208/259
28/16-2
-
8/10/2019 Mankiw Solution
209/259
-
8/10/2019 Mankiw Solution
210/259
28/16-4
-
8/10/2019 Mankiw Solution
211/259
-
8/10/2019 Mankiw Solution
212/259
29/17-2
-
8/10/2019 Mankiw Solution
213/259
29/17-3
-
8/10/2019 Mankiw Solution
214/259
29/17-4
-
8/10/2019 Mankiw Solution
215/259
30/18-1
-
8/10/2019 Mankiw Solution
216/259
R e a
l I n t e r e s t
R a t e
Quantity of Loanable Funds
Supply
r1
Demand
Net Foreign Investment
R e a
l I n t e r e s t
R a t e
Quantity of Dollars
D2
E2
E1
D1
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
Supply
30/18-2
-
8/10/2019 Mankiw Solution
217/259
-
8/10/2019 Mankiw Solution
218/259
R e a
l E x c h a n g e
R a t e
Quantity of Dollars
Supply
E2
E1
D2D1
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
S 1
S 2
r1
r2
Demand
Net Foreign Investment
R e a
l I n t e r e s
t R a t e
Quantity of Dollars
Demand
E1
E2 R e a l
E x c
h a n g e
R a t e
Net Foreign Investment
S 2S 1
30/18-4
-
8/10/2019 Mankiw Solution
219/259
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
S 1
S 2
r1
r2
Demand
Net Foreign Investment
R e a
l I n t e r e s
t R a t e
Quantity of Dollars
Demand
E1
E2
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
S 2S 1
30/18-5
-
8/10/2019 Mankiw Solution
220/259
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
Supply
r1
Demand
Net Foreign Investment
R e a
l I n t e r e s
t R a t e
Quantity of Dollars
D1
E1
E2
D2
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
Supply
30/18-6
-
8/10/2019 Mankiw Solution
221/259
R e a
l I n t e r e s t
R a t e
Quantity of Loanable Funds
Supply
r1
Demand
Net Foreign Investment
R e a
l I n t e r e s t
R a t e
Quantity of Dollars
D2
E2
E1
D1
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
Supply
30/18-7
-
8/10/2019 Mankiw Solution
222/259
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
Supply
r1
Demand
Net Foreign Investment
R e a
l I n t e r e s
t R a t e
Quantity of Dollars
D2
E2
E1
D1
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
Supply
30/18-8
-
8/10/2019 Mankiw Solution
223/259
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
Supply
r2
r1
Demand
NFI1
NFI2
R e a
l I n t e r e s
t R a t e
Quantity of Dollars
D2
E1
E2
D1
R e a
l E x c
h a n g e R a t e
Net Foreign Investment
S 2S 1
30/18-9
-
8/10/2019 Mankiw Solution
224/259
R e a
l I n t e r e s
t R a t e
Quantity of Loanable Funds
Supply
r1
r2
Demand
NFI2
NFI1
R e a
l I n t e r e s
t R a t e
Quantity of Canadian Dollars
D1
E2
E1
D2
R e a l
E x c
h a n g e
R a t e
Net Foreign Investment
S 1S 2
30/18-10
-
8/10/2019 Mankiw Solution
225/259
R e a
l I n t e r e s t
R a t e
Quantity of Loanable Funds
Supply
r2
r1
Demand
NFI1
NFI2
R e a
l I n t e r e s t
R a t e
Quantity of Dollars
D2
E1
E2
D1
R e a
l E x c
h a n g e
R a t e
Net Foreign Investment
S 2S 1
30/18-11
-
8/10/2019 Mankiw Solution
226/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
Short-runaggregatesupply
Aggregatedemand
31/19-1
-
8/10/2019 Mankiw Solution
227/259
P r i c e
L e v e
l
Quantity of Output
Long-run
aggregatesupplySRAS 2
AD1
A
C
B
AD2
SRAS 1
31/19-2
-
8/10/2019 Mankiw Solution
228/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
SRAS 1
Aggregatedemand
A
B
SRAS 2
31/19-3
-
8/10/2019 Mankiw Solution
229/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply Short-run
aggregatesupply
Aggregatedemand
31/19-4
-
8/10/2019 Mankiw Solution
230/259
31/19-5
-
8/10/2019 Mankiw Solution
231/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
SRAS 2
Aggregatedemand
A
B
SRAS 1
31/19-6
-
8/10/2019 Mankiw Solution
232/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
Aggregatedemand
B
A
SRAS 2
SRAS 1
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
Short-runaggregatesupply
AD1
B
A
AD2
31/19-7
-
8/10/2019 Mankiw Solution
233/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
Aggregatedemand
B
A
SRAS 2
SRAS 1
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
Short-runaggregatesupply
AD2
B
A
AD1
31/19-8
-
8/10/2019 Mankiw Solution
234/259
P r i c e
L e v e
l
Quantity of Output
Long-runaggregatesupply
SRAS 1C
A
BP2
P 3
P 1
Y1 Y2
AD1
AD2
SRAS 2
31/19-9
-
8/10/2019 Mankiw Solution
235/259
31/19-10
-
8/10/2019 Mankiw Solution
236/259
32/20-1
-
8/10/2019 Mankiw Solution
237/259
I n t e r e s t
R a t e
Quantity of Money
Money supply
MD1
MD2
r1
r2
I n t e r e s t
R a t e
Quantity of Money
MS1 MS2
Money demand
r1
r2
32/20-2
-
8/10/2019 Mankiw Solution
238/259
I n t e r e s t
R a t e
Quantity of Money
Money supply
MD1
MD2r1
r2
I n t e r e s t R a t e
Quantity of Money
Money supply
MD1
MD2r1
r2
32/20-3
-
8/10/2019 Mankiw Solution
239/259
I n t e r e s t R a t e
Quantity of Money
MD1
MS1MS2
MD2
r1
r2
I n t e r e s t
R a t e
Quantity of Money
Money supply
MD1MD2
r1
r2
32/20-4
-
8/10/2019 Mankiw Solution
240/259
I n t e r e s t
R a t e
Quantity of Money
MD1
MS1 MS2
MD2
r1
r2
32/20-5
-
8/10/2019 Mankiw Solution
241/259
32/20-6
-
8/10/2019 Mankiw Solution
242/259
32/20-7
-
8/10/2019 Mankiw Solution
243/259
-
8/10/2019 Mankiw Solution
244/259
I n f l a t i o n
R a t e
Unemployment Rate
Phillips curve
33/21-1
-
8/10/2019 Mankiw Solution
245/259
I n f l a t i o n
R a t e
Unemployment Rate
SRPC 2
Long-runPhillips curve
SRPC 1
I n f l a t i o n
R a t e
Unemployment Rate
SRPC 1
A
BC
Long-runPhillips curve
SRPC 2
33/21-2
-
8/10/2019 Mankiw Solution
246/259
-
8/10/2019 Mankiw Solution
247/259
-
8/10/2019 Mankiw Solution
248/259
I n f l a t i o n
R a t e
Unemployment Rate
SRPC 1
Long-runPhillips curve
SRPC 2
33/21-5
-
8/10/2019 Mankiw Solution
249/259
-
8/10/2019 Mankiw Solution
250/259
I n f l a t i o n
R a t e
Unemployment Rate
SRPC 2e
a
d
Long-runPhillips curve
SRPC 1
c
33/21-7
-
8/10/2019 Mankiw Solution
251/259
I n f l a t i o n
R a t e
Unemployment Rate
SRPC 3
Long-run
Phillips curve
SRPC 2
SRPC 1
5.5% 6%
33/21-8
-
8/10/2019 Mankiw Solution
252/259
33/21-9
-
8/10/2019 Mankiw Solution
253/259
34/22-1
-
8/10/2019 Mankiw Solution
254/259
34/22-2
-
8/10/2019 Mankiw Solution
255/259
P r i c e L e v e
l
Quantity of Output
Long-runaggregate supply
AD1
SRAS 1SRAS 2
AD2
Y1Y2
A
B
C
I n t e r e s t
R a t e
Quantity of Money
r2
MD1
MD2r1
P r i c e
L e v e
l
Quantity of Output
P 1P 2
Y2
AD2AD1
Y1
Moneysupply
Long-runaggregate supply
Short-runaggregate supply
34/22-3
-
8/10/2019 Mankiw Solution
256/259
I n t e r e s t
R a t e
Quantity of Money
r2r3
MD1
MS1 MS2
MD2r1
P r i c e
L e v e
l
Quantity of OutputY3Y2
AD2AD3
AD1
Y1
Long-runaggregate supply
Short-runaggregate supply
34/22-4
-
8/10/2019 Mankiw Solution
257/259
34/22-5
-
8/10/2019 Mankiw Solution
258/259
I n f l a t i o n
R a t e
Unemployment Rate
Long-runPhillips curve
SRPC 1
SRPC 3
SRPC 2
A
B
C
34/22-6
-
8/10/2019 Mankiw Solution
259/259