1. AP Econ Week#21 Winter 2014 Ch#4 & Ch#5

2. Economics 2/2/15 http://mrmilewski.com No School: Snow Day#2 Photo: Mr. Milewski Grosse Ile, MI 2/1/15

3. Economics 2/3/15 http://mrmilewski.com No School: Snow Day#3 Photo: Mr. Milewski Grosse Ile, MI 2/3/15

4. Economics 2/4/15 http://mrmilewski.com OBJECTIVE: Examine the effect of regulations on market economies. APMicro-I.B Language objective: Write about regulations on market economies. I. Administrative Stuff -attendance II. Commanding Heights -questions on episode#2 Day#1 Homework: Begin reading Ch#5

5. Economics 2/5/15 http://mrmilewski.com OBJECTIVE: Begin examination of market failures. APMicro-I.B Language objective: Write about market failures. I. Journal#52 pt.A -continue watching Commanding Heights II. Journal#52 pt.B -notes on market failures (Chapter#5) Homework: On learnsmart & Finish reading Ch#5

6. Market Failures Market fails to produce the right amount of the product Resources may be: Over-allocated Under-allocated LO1 5-6

7. Demand-Side Failures Impossible to charge consumers what they are willing to pay for the product Some can enjoy benefits without paying LO1 5-7

8. Supply-Side Failures Occurs when a firm does not pay the full cost of producing its output External costs of producing the good are not reflected in supply LO1 5-8

9. Efficiently Functioning Markets Demand curve must reflect the consumers full willingness to pay Supply curve must reflect all the costs of production LO1 5-9

10. Consumer Surplus Difference between what a consumer is willing to pay for a good and what the consumer actually pays Extra benefit from paying less than the maximum price LO2 5-10

11. Consumer Surplus LO2 Consumer Surplus (1) Person (2) Maximum Price Willing to Pay (3) Actual Price (Equilibrium Price) (4) Consumer Surplus Bob$13$8$5 (=$13-$8) Barb128 4 (=$12-$8) Bill118 3 (=$11-$8) Bart108 2 (=$10-$8) Brent98 1 (= $9-$8) Betty88 0 (= $8-$8) 5-11

12. Consumer Surplus LO2 Price (per bag) Quantity (bags) D Q1Q1 P1P1 Consumer Surplus Equilibrium Price 5-12

13. Producer Surplus Difference between the actual price a producer receives and the minimum price they would accept Extra benefit from receiving a higher price LO2 5-13

14. Producer Surplus LO2 Producer Surplus (1) Person (2) Minimum Acceptable Price (3) Actual Price (Equilibrium Price) (4) Producer Surplus Carlos$3$8$5 (=$8-$3) Courtney48 4 (=$8-$4) Chuck58 3 (=$8-$5) Cindy68 2 (=$8-$6) Craig78 1 (=$8-$7) Chad88 0 (=$8-$8) 5-14

15. Producer Surplus LO2 Price (per bag) Quantity (bags) S Q1Q1 P1P1 Equilibrium price Producer surplus 5-15

16. New Access Code W433-DX47-G6NJ-87EA-RH66

17. Economics 2/6/15 http://mrmilewski.com OBJECTIVE: Continue examination of market failures. APMicro-I.B Language objective: Discuss failures. I. Administrative Stuff -attendance II. Review homework on learnsmart -discuss concepts from online homework (Chapter#5) Homework: Continue reading Ch#5

18. AP Exam Registration Students, you can now pay for your AP Exams by cash (NO CHECK). Give the cash to the secretary in the Counseling Office Tuesdays and Thursdays. Exam fees are $91.00 per exam (there are 2 exams for Econ, so the cost is $182). If you receive free or reduced lunch, Exam fees are $25.00 per exam. Exam fees MUST BE PAID by March 17 th !