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Supply and Demand

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A Teaching Topic in Economic Analysis 

Supply and Demand

This topic explores the phenomena produced by different combinations of consumer demand for a good or service and producer supply in a market. It examines the properties of different types of goods, such as Giffen goods, luxury goods, normal goods, and ordinary goods. This topic runs through the process of aggregating the supply and demand of individual producers and consumers into the total market supply and demand.

Topic Learning Outcome: Appropriately utilize and interpret results of applying to the analysis of public policy and management problems the basic principles of supply and demand, including following concepts. 

Core Concepts associated with this Topic: Net Demand; Demand Curve; Diminishing Marginal Rate of Substitution; Diminishing Technical Rate of Substitution; Engel Curve; Equilibrium Principle; Extensive Margin; Giffen Good; Income Elasticity of Demand; Income Offer Curve; Indifference Curve; Inferior Good; Inverse Demand Function; Law of Demand; Luxury Good; Market Demand Curve; Necessary Good; Normal Good; Ordinary Good; Perfect Complements; Perfect Substitutes; Short Run Industry Supply.

Recommended Reading

University of Toronto: PPG-1002

Varian, Hal R., and Jack Repcheck. Intermediate microeconomics: a modern approach. Vol. 6. New York, NY: WW Norton & Company, 2010. Chapter 6

Carleton Unversity: PADM-5111

Frank, Robert, Ian Parker, and Igela Alger. Microeconomics and Behaviour, 5th Canadian Edition. New York: McGraw-Hill, 2013. Chapters 1 and 2

Harvard Kennedy School: API-101

Pindyck, Robert S. and Daniel L. Rubinfeld. Microeconomics, 8th Edition. Prentice-Hall, 2012. Chapter 1 and 2

NYU Wagner: GP-1018

Krugman, Paul and R. Wells, Microeconomics, 3rd edition. London: Worth Publishers, 2012. . Chapter 3

Johnson-Shoyama: JS-805

Krugman, Paul, Robin Wells, and Anthony Myatt. Microeconomics: 1st Canadian Edition. London: Worth Publishers, 2006. Chapters 3 and 5

Ford School of Public Policy: Public Policy 555

Pindyck, Robert S., and D. Rubinfeld. Microeconomics, 7th edition. Upper Saddle River: Patience-Hall, 2007. Chapter 2

George Washington: PPPA-6003

Mankiw, N. Gregory. Principles of Microeconomics, 6th edition. Mason: South-Western College Publishers, 2011. Chapter 2 Appendix and Chapter 4

Wheelan, Charles. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton
& Company, 2010. Chapter 1

American: PAUD-630

Krugman, Paul and R. Wells, Microeconomics, 3rd edition. London: Worth Publishers, 2012. Chapter 3

UCLA: PLC-201

Goolsbee, Austan, Steven Levitt, and Chad Syverson. Microeconomics. New York:  Worth Publishers, 2013. Chapter 2

Rutgers- Economics in Public Policy

Pindyck, Robert S., and D. Rubinfeld. Microeconomics, 7th edition.  Upper Saddle River: Patience-Hall, 2007. Chapter 1

 Sample Assessment Questions:

1.) What do economists mean when they refer to a "perfectly competitive market." Using a diagram, please illustrate how prices and quantities are determined in a perfectly competitive market.

2.)  What are complementary goods? Use a diagram to show an individual's utility function for a pair of complementary goods.

3.) What is the law of demand? Why is this an important concept for public policy students to understand?

Page updated by Sean Goertzen on 16 April 2015.

 


Important Notices
© University of Toronto 2008
School of Public Policy and Governance