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| | {{Economics_Lectures}} | | {{Economics_Lectures}} |
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| − | Thirteenth Lecture – The Big Picture
| + | We’ve covered all the issues concerning individual decisions by companies and consumers. We’ve discussed supply and demand. We’ve addressed marginal revenue and marginal cost. We've discussed numerous other concepts of the free market. |
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| − | Instructor, Andy Schlafly
| + | Stephen Colbert, when interviewing your instructor on the Colbert Report, asked if we discuss "Keynesian economics." Your instructor answered "no", we discuss "free market economics." What is the difference? |
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| − | ==Introduction== | + | == Banking the Federal Reserve == |
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| − | We’ve covered all the issues concerning individual decisions by companies and consumers. We’ve discussed supply and demand. We’ve addressed marginal revenue and marginal cost.
| + | On the Colbert Report Tuesday, on the same show that your instructed appeared, there was discussion of the "Federal Reserve Bank." |
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| − | This class we will explain the big picture of trade. We also begin our final review.
| + | == Review: Short and Long Run == |
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| − | <review the significance of the "long run" versus the "short run">
| + | On the CLEP exam, 20% or more of the questions mention the "short run" or the "long run," or both. Do we fully understand the differences, and what they signify? Let's review this so you can feel comfortable whether or or both of the concepts arises. |
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| − | <Banking and capital>
| + | == Review: Monopolistic Competition == |
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| | + | *product differentiation |
| | + | *profit maximization |
| | + | *inefficiencies |
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| | + | == Review: Production Costs == |
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| | + | === Marginal Product === |
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| | + | === Cost Minimization === |
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| | ==Trade== | | ==Trade== |
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| | For most of our country’s history (until the Sixteenth Amendment legalized the income tax), our federal government’s major source of revenue was tariffs. The issue of the tariff was a recurrent controversy that divided the pro-tariff North from the anti-tariff South and was a major cause of the Civil War. | | For most of our country’s history (until the Sixteenth Amendment legalized the income tax), our federal government’s major source of revenue was tariffs. The issue of the tariff was a recurrent controversy that divided the pro-tariff North from the anti-tariff South and was a major cause of the Civil War. |
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| | + | ==General Review== |
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| − | | + | The key to mastering economics is to learn to quiz yourself on the principles to make sure you understand it. |
| − | ==Review==
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| − | The key to mastering economics is to learn to quiz yourself on the principles to make sure you understand it. The review list in Lecture #10 should be useful, and return to it again and again. | |
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| | What is the most important concept of the course? Perhaps it is the obvious desire of companies to maximize their profits. Whether it is a monopoly or a perfectly competitive firm, the firm shares this common goal with all other firms: it wants to make more profits. You can answer 20% or more of the questions on any microeconomics exam simply by applying that basic rule. And at what point does any company maximize its profits? Where marginal revenue (MR) declines to the point where it equals marginal cost (MC). When marginal revenue declines further (or marginal cost increases more), then the company is losing profits. It won’t do that. | | What is the most important concept of the course? Perhaps it is the obvious desire of companies to maximize their profits. Whether it is a monopoly or a perfectly competitive firm, the firm shares this common goal with all other firms: it wants to make more profits. You can answer 20% or more of the questions on any microeconomics exam simply by applying that basic rule. And at what point does any company maximize its profits? Where marginal revenue (MR) declines to the point where it equals marginal cost (MC). When marginal revenue declines further (or marginal cost increases more), then the company is losing profits. It won’t do that. |