《《西方经济学(下)》讲义(2014)》.pptVIP

* * This topic and the next one (cross-price elasticity) do not appear anywhere else in the book. Instructors who are pressed for time may consider cutting these topics. (This is merely my suggestion, not the official position of Greg Mankiw or Cengage/South-Western.) * * An example: Student demand for textbooks that their professors have required for their courses. Here, it’s a little more clear that elasticity would be small, but not zero. At a high enough price, some students will not buy their books, but instead will share with a friend, or try to find them in the library, or just take copious notes in class. Another example: Gasoline in the short run. * * This is the intermediate case: the demand curve is neither relatively steep nor relatively flat. Buyers are neither relatively price-sensitive nor relatively insensitive to price. (This is also the case where price changes have no effect on revenue.) * * A good example here would be breakfast cereal, or nearly anything with readily available substitutes. An elastic demand curve is flatter than a unit elastic demand curve (which itself is flatter than an inelastic demand curve). * * In this diagram, the green arrows represent flows of income/payments. The red arrows represent flows of goods services (including services of the factors of production in the lower half of the diagram). To keep the graph simple, we have omitted the government, financial system, and foreign sector, as discussed on the next slide. You may wish to change the order in which the elements appear. To do so, look for “Custom Animation” in your version of PowerPoint. * * Some students mistake the upper vertical intercept ($60 in this example) for the height of the blue triangle: they forget to subtract off the height of the bottom of the triangle from the height of the top of the triangle. So, the first one or two times, it might be worthwhile to show them how to find the height of the triangle. * *