Reading Notes

Economics Dr. Sauer

Chapter 3: Simultaneous Equations 3.1 Solving Simultaneous Linear Equations What are some methods of solving 2 equations with 2 unknowns?

If adding or subtracting a system of equations results in a contradiction, then there is ___________ solution(s). If a system of equations is parallel lines, then there is _______________solution(s). If the equations are the same (just differ by a factor), then there is _____________ solution(s). 3.2 Equilibrium and Break Even Read through to review/familiarize yourself with the following concepts. Section 3.2.1: Markets A goods market equilibrium occurs when:

A labor market equilibrium occurs when:

Section 3.2.2: Price Controls A price ceiling is:

A price floor is:

Section 3.2.3: Related Goods Demand equation for good X, when X and Y are substitutes: Demand equation for good X, when X and Y are complements:

Section 3.2.4: Taxes and Subsidies The effects of a tax on a good include: The ______________ curve will translate vertically upwards. The price consumers pay will ______________. The price sellers get to keep will _______________. The equilibrium quantity will ________________. The effects of a subsidy on the production of a good include. The ______________ curve will translate vertically downwards. The price consumers pay will ______________. The price sellers get to keep will _______________. The equilibrium quantity will ________________.

Section 3.2.5: Breaking Even The break-even point occurs when:

3.3 Consumer and Producer Surplus Consumer surplus is defined as: Producer surplus is defined as: Total surplus is defined as:

3.4 The National Income Model and IS-LM Model Section 3.4.1: National Income Model Y stands for: E= Steps for deriving the equilibrium level of national income: E stands for:

Section 3.4.2: IS-LM Model We will cover this in class.

3.5 Excel for Simultaneous Linear Equations Skip this section.

3.6 Summary After we work through this chapter in class, review this section and write any notes here.