praxeology through price theory, lecture 4 with robert murphy - mises academy

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Mises Academy Austrian Econ I: Praxeology Through Price Theory Robert P. Murphy Spring 2011 Lecture 4 May 18

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Page 1: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

Mises AcademyAustrian Econ I:

Praxeology Through Price Theory

Robert P. MurphySpring 2011

Lecture 4May 18

Page 2: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

2nd half Chapter 21. Schedules�CurvesII. Law of Supply/DemandIII. ElasticityIV. SpeculationV. Total Demand to Hold

VI. Time to Change VII. Demand vs. Quantity Demanded VIII. Producing the Stock IX. Rothbard on Property

Page 3: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

I. Supply/Demand Schedule�

Page 4: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

� Supply/Demand Curves

Page 5: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

� Generic Supply/Demand Curves

Page 6: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

II. Laws of Supply/Demand

As price increases, the quantity supplied will either increase or stay the same.

As price decreases, the quantity demanded will either increase or stay the same.

Page 7: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

III. Elasticity

● If demand is elastic (in a certain range of prices), then lowering the price will lead to consumers spending more total money on the good.

● If demand is inelastic, then lowering the price will lead to less total money spent on the good.

Page 8: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

IV. Speculation

Page 9: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

V. Total Demand to Hold

TOTAL DEMAND TO HOLD =

EXCHANGE DEMAND (I.E. NORMAL DEMAND) +

RESERVATION DEMAND (I.E. AMOUNT SELLERS WITHHOLD FROM THE MARKET)

Page 10: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

A. Regular Supply/Demand�

Page 11: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

B. � Total Stock/Demand to Hold

Page 12: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

C. Total Stock/Demand to Hold

Page 13: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

VI. Now It’s Time to Change…

Page 14: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

VII. Demand vs. Quantity demanded

Page 15: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

VIII. Producing the Stock

Page 16: Praxeology Through Price Theory, Lecture 4 with Robert Murphy - Mises Academy

IX. Rothbard on Property