The key lesson here is to understand terminologies more than the math.
Prof. Jonatan Jelen was rated funny online. That his teaching is more on jokes than content.
Nothing about his assistance, "Don", who substitutes Jelen from time to time. However, Don focuses on the text, which is better.
The first test is all about terminologies and definitions and appears to be following the textbook's online quizzes.
Rittenberg, L., Tregarthen, T., Principles of Microeconomics, v. 2.0, March 2012, eISBN 9781-4533-3267-2
To score in Jelen's class one just needs to memorize the terminologies from the textbook. And do the quizzes from the text online. Jelen's exam questions follow whatever the text says verbatim. His lectures have little to do with the test. He even made mistakes in some cases which were contrary to the textbook: ie. fixed price only happens in long run (Jelen) while textbook says short run. When a student confronted him, Jelen tried to redefine his meaning of "fixed price".
Jelen referred us to Khanacademy free videos on microeconomics by Salman Khan.
Jelen's "stories" are actually fascinating. I learned a lot. Therefore, it is best to read the text prior to his lectures, which aren't following the text really well.
Chapter 1
A hypothesis can be proven false, otherwise it becomes a theory and then becomes law.
Chapter 2
Chapter 3
Chapter 4
Chapter 5
: ratio of percentage change of dependent variable to that of independent variable.
Elasticity
Price elasticity of demand
: % change demanded over % change in price
> 1: Price elastic
= 1: Unit price elastic
< 1: Price inelastic
Arc Elasticity - Measurement relative to average
Total Revenue: quantity (output) times price per unit. Note there's a difference between price & cost.
Perfectly inelastic: Situation in which the price elasticity of demand is zero.
Perfectly elastic: Situation in which the price elasticity of demand is infinite.
Income elasticity of demand: The percentage change in quantity demanded at a specific price divided by the percentage change in income that produced the demand change, all other things unchanged.
Cross price elasticity of demand: It equals the percentage change in the quantity demanded of one good or service at a specific price divided by the percentage change in the price of a related good or service.
Price elasticity of supply: The ratio of the percentage change in quantity supplied of a good or service to the percentage change in its price, all other things unchanged.
Chapter 6: Markets, Maximizers, and Efficiency
Economic profit: The difference between total revenue and total cost.
Net benefit: The total benefit of an activity minus its opportunity cost.
Marginal benefit: The amount by which an additional unit of an activity increases its total benefit.
Marginal cost: The amount by which an additional unit of an activity increases its total cost.
Marginal decision rule: If the marginal benefit of an additional unit of an activity exceeds the marginal cost, the quantity of the activity should be increased. If the marginal benefit is less than the marginal cost, the quantity should be reduced.
Constraint: A boundary that limits the range of choices that can be made.
Efficient: The allocation of resources when the net benefits of all economic activities are maximized.
Property rights: A set of rules that specify the ways in which an owner can use a resource.
Exclusive property right: A property right that allows its owner to prevent others from using the resource.
Transferable property right: A property right that allows the owner of a resource to sell or lease it to someone else.
Efficiency condition: A situation that requires a competitive market with well-defined and transferable property rights.
Consumer surplus: The amount by which the total benefits to consumers from consuming a good exceed their total expenditures on the good.
Producer surplus: The difference between the total revenue received by sellers and their total cost.
Market failure: The failure of private decisions in the marketplace to achieve an efficient allocation of scarce resources.
Public good: A good for which the cost of exclusion is prohibitive and for which the marginal cost of an additional user is zero.
Private good: A good for which exclusion is possible and for which the marginal cost of another user is positive.
Free riders: People or firms that consume a public good without paying for it.
External cost: A cost imposed on others outside of any market exchange.
External benefit: An action taken by a person or firm that creates benefits for others in the absence of any market agreement.
Common property resource: Resources for which no property rights have been defined.
Chapter 7: The Analysis of Consumer Choice
Total Utility: the number of units of utility that a consumer gains from consuming a given quantity of a good, service, or activity during a particular time period.
Marginal Utility: The amount by which total utility rises with consumption of an additional unit of a good, service, or activity, all other things unchanged.
Law of diminishing marginal utility: This tendency of marginal utility to decline beyond some level of consumption during a period.
Budget constraint: a restriction that total spending cannot exceed the budget available.
Utility-maximizing condition: Utility is maximized when total outlays equal the budget available
Income compensated price change: An imaginary exercise in which we assume that when the price of a
good or service changes, the consumer’s income is adjusted so that he or she has just enough to purchase the original combination of goods and services at the new set of prices.
Substitution effect: The change in a consumer’s consumption of a good in response to an income-compensated price change.
Income effect: The change in consumption of a good resulting from the implicit change in income because of a price change is called the income effect of a price change.
Normal Goods: Demand rises when income rises.
Inferior Goods: Demand falls when income rises.
Budget line: shows graphically the combinations of two goods a consumer can buy with a given
budget.
Indifference curve: Graph that shows combinations of two goods that yield equal levels of utility.
Marginal rate of substitution: The maximum amount of one good a consumer would be willing to give up in order to obtain an additional unit of another.
Chapter 8: Production & Cost
Chapter 9
Explicit costs: Charges that must be paid for factors of production such as labor and capital.
Accounting profit: Profit computed using only explicit costs.
Implicit cost: A cost that is included in the economic concept of opportunity cost but that is not an explicit cost.
Constant-cost industry: Industry in which expansion does not affect the prices of
factors of production.
Increasing-cost industry: Industry in which the entry of new firms bids up the prices of factors of production and thus increases production costs.
Decreasing-cost industry: Industry in which production costs fall in the long run as firms enter.
Long-run industry supply curve: A curve that relates the price of a good or service to the quantity produced after all long-run adjustments to a price change have been completed.
Chapter 10
Monopoly firm likely to produce less and charge more.
Barriers to entry:
Prof: Sunk cost is always fixed cost, but not vice versa.
Location advantage.
If long-run average cost declines as the level of production increases, a firm is
said to experience economies of scale.
Natural Monopoly: A firm that confronts economies of scale over the entire range of outputs demanded in its industry.
Restricted Ownership of Raw Materials and Inputs
Government Restrictions: 17-year-patent to encourage innovation. Licensing/certification.
network effects: Situations where products become more useful the larger the number of users of the product.
marginal decision rule: a firm will produce additional units of a good until marginal revenue equals marginal cost.
Prof's Abnormal Profit appears to be the green area of Fig. 10.7.
Prof: Monopolistic competition (e.g. Apple) not market controlled. But mind control. Making product as "cocaine".
Chapter 11
Chapter 12 Wages and Employment in Perfect Competition
marginal revenue product: The amount that an additional unit of a factor adds to a firm’s total revenue during a period.
Chapter 14 Imperfectly Competitive Markets for Factors of Production
Agency problem = Agency Dilemma = Principal-Agent Problem: Conflict of interest between Agent & Principal-e.g. dentist sells patient expensive product for dentist's own benefit under the guise of benefit for the patient.
Chapter 15
Chapter 19 Inequality, Poverty, and Discrimination
Lorenz curve: A curve that shows cumulative shares of income received by individuals or groups. The more bowed out the curve, the less equal the distribution. Every 20% on the curve is a quintile.
Gini Coefficient: A measure of inequality expressed as the ratio of the area between the Lorenz curve and a 45 degree line and the total area under the 45 degree line.
10/28/2014
Term: Monopsony mentioned. Opposite of Monopoly. One buyer and many sellers.
11/13/2014
Agency problem = Agency Dilemma = Principal-Agent Problem: Conflict of interest between Agent & Principal-e.g. dentist sells patient expensive product for dentist's own benefit under the guise of benefit for the patient.
11/18/2014
On tariff, taxes. Laffer curve mentioned. I didn't know Lexus was actually Toyota. Prof. said they didn't need research. They just make a fancy name "LEXUS!" to make it a new brand. Of course, I must read it up.
11/20/2014
Economics by Paul Samuelson, supposedly best textbook. - Prof.