Firm Costs/Long Run Costs and Economies of Scale

In class, students learned about fixed costs, variable costs and marginal cost.  Students also used data to figure out Average Fixed Costs (spreading effect), Average Variable Costs (diminishing returns effect) and Average Total Costs (U-shaped for most industries). 

Afterwards, students took a look at various short-run average total cost curves to make decisions about the long-run. 

The notes and homework are attached.


Notes - Average Cost Curves and Economies of Scale


HW - Complete HW Packet
         Read Modules 56 and Modules 57

Profit, Profit Maximazation and The Production Function

In class we went over Module 52, 53 and 54.  Students learned about the difference between accounting profit and economic profits (implicit costs).  Students also learned how  a firm maximizes profit (when marginal revenue = marginal costs).  Lastly, students were introduced to the production function and learned about fixed vs. variable input costs.

The homework is listed below and the notes are attached.

Notes - Profit, Profit Maximization and The Production Function

HW - Read Module 55 and 56

Utility Maximization

In class students were introduced to the Consumption Possibilities Curve (Budget Line) and talked about utility maximization.  Utility is maximized when the marginal utility per dollar of each good are equal.

The notes are attached below as is the homework.

Notes - Utility Maximization

HW - Quiz - Behind the Demand Curve
          Read modules 52 and 53


***Answer Key - Surplus and Tax Incidence

Surplus and Tax Incidence

In class student learned how to calculate consumer (willingness to pay - price) and producer surplus (price - cost).  Afterwards, students learned about how taxes are levied and how the tax incidence affects consumer and producer surplus.

The notes and homework are attached.


Notes - Surplus and Tax Incidence

HW - Packet - Surplus and Tax Incidence
          Read Module 51



***Answer Key - Elasticity Packet***

Elasticities cont.

In class we went over the quiz.  If students would like to retake the quiz; do so as soon as possible.
Afterwards, students worked on an activity involving elasticities.   I attached the document below and we will go over it next class.

The homework is listed below and the notes are attached.

Notes - Determinants of Elasticites

CW - Elasticity

HW - Finish Classwork
          Read Module 50 (Consumer/Producer Surplus)

Other Elasticities

In class students learned about other elasticities:

1.  Cross Price Elasticity of Demand - determines if goods are compliments/substitutes.
2.  Income Elasticity of Demand - determines if goods are normal/inferior.
3.  Price Elasticity of Supply - availability of resources to expand productions.

The homework is listed below and the notes are attached.

Notes - Other Elasticities

HW - Read Module 49 and 50

Price Elasticity of Demand

In class students learned how to calculate the Price Elasticity of Demand.  Students also learned the difference between elastic (PED > 1) and inelastic (PED < 1) goods. 

The homework is listed below and the notes are attached.

Notes - Price Elasticity of Demand

HW - Study for Quiz #1 - Section 1 and 2
          Read Module 48