1. NS3040 Spring Term 2016 Basic Microeconomic Tools
IMF, Seven Questions About the Recent Oil Price Slump, December 22, 2014

2. Production Possibility Curve I
Normal Production Possibility Curve – Increasing Costs

3. Production Possibility Curve II
Constant Cost Production Possibility Curve

4. Production Possibility Curve III
Decreasing Cost Production Possibility Curve

5. Production Possibility Curve IV
Economic Growth Over Time

6. Production Possibility Curve V
Resource Constraint Production Possibility Curve

7. Supply and Demand I

8. Supply and Demand II

9. Operation of Supply/Demand
Factors that affect demand and supply
Demand – shift demand curve
Income changes
Prices of other goods – complements and substitutes
Changing preferences
Supply – shift demand curve
Costs of production
Technological change
Increases in productivity

10. Elasticity of Demand I

11. Elasticity of Demand II

12. Interference with Equilibration
Classic interferences in the market place
Keep the price above the equilibrium
Minimum wage -- unemployment
Farm Prices – food surpluses
Keep the price below the equilibrium
Rent control -- shortage of housing
Overvalued exchange rates - balance of payments deficits