Tag: Economics (Field Of Study)

Maximizing Profit and the Average Cost Curve

Maximizing Profit and the Average Cost Curve

♪ [music] ♪ – [Alex] Now that we know how to find the profit maximization point, we’re going to show the amount of profit on the diagram using the average cost curve. So as I said in the last lecture, average cost is the cost per unit of output. That is, average cost is total …

Minimization of Total Industry Costs of Production

Minimization of Total Industry Costs of Production

♪ [music] ♪ – [Alex] In this chapter, we return to the invisible hand. We’re going to show some remarkable properties of competitive markets, properties that are a product of human action but not of human design. That is, these properties have neither been designed nor intended, nor perhaps even understood by market participants. And …

Entry, Exit, and Supply Curves: Increasing Costs

Entry, Exit, and Supply Curves: Increasing Costs

♪ [music] ♪ – [Alex Tabarrok] Now that we understand a firm’s cos tcurves, and its entry and exit decisions, we’re able to show how supply curves are actually derived from these more fundamental considerations. Let’s take a closer look. The supply curve is built upon firm entry and exit decisions and the effect of …

Entry, Exit, and Supply Curves: Constant Costs

Entry, Exit, and Supply Curves: Constant Costs

♪ [music] ♪ – [Alex] Okay — this talk is going to be a bit more involved. What we’re going to show is how a constant cost industry generates a flat supply curve. Let’s begin. A constant cost industry is one where it’s very easy to expand output without pushing up costs. So for example, …

The Costs and Benefits of Monopoly

The Costs and Benefits of Monopoly

♪ [music] ♪ – [Alex] In our final talk in monopoly, we’re going to discuss the costs of monopoly, but also the potential benefits. The major costs of monopoly is that compared to competition, monopoly is inefficient. It leads to a loss in the gains from trade or a deadweight loss. Let’s remind ourselves about …

Business Cycles Explained: Keynesian Theory

Business Cycles Explained: Keynesian Theory

Simple way to think about the Keynesian model. Keynesian, New Keynesian. But let’s boil it down to essentials. Economic downturns are very often caused by a shortfall in aggregate demand. Aggregate demand you can think of very crudely as spending. So more formally, aggregate demand is consumption plus investment plus government spending. Think of that …

The Hockey Stick of Human Prosperity

The Hockey Stick of Human Prosperity

♪ [music] ♪ – [Don] The astonishing growth in prosperity in the last two or three hundred years is one of the greatest events of humankind. Take the average human in, say, the year 1000 BC. He’s poor, fighting to find food and to fend off diseases. Fast forward 500 years to the time of …

Comparative Advantage and the Tragedy of Tasmania

Comparative Advantage and the Tragedy of Tasmania

♪ [music] ♪ – [Don Bourdreaux] Let me tell you about the island of Tasmania. It’s about 130 miles off the coast of South Eastern Australia A long time ago when seas were low Tasmania was part of Australia. During that time the archaeological record documents that Tasmanians fished, and they used bone tools. About …

Division of Labor: Burgers and Ships

Division of Labor: Burgers and Ships

♪ [music] ♪ – [Don] The benefits of voluntary trade are obvious. Suppose this guy has bananas and this guy has oranges. He needs oranges for marmalade and this guy needs bananas for banana bread. They swap — they exchange. Each guy is made better off through trade. In our last video, though, we saw …