This course offers an introduction to the functions of individual decision-makers—both consumers and producers—within the larger economic system. Emphasis is on the nature and functions of product markets, the theory of the firm under varying conditions of competition and monopoly, and the role of government in promoting efficiency in the economy. Most people make the incorrect assumption that economics is ONLY the study of money. My primary goal in this course is to shatter this belief. During this course, we will be addressing the above questions as well as many more relating to: -the environment -love and marriage -crime -labor markets -education -politics -sports -business My main goal is to show you the way economists think and how to use this analytical system to answer questions related not only to these and other important human issues, but to anything you end up doing with your life after this class. After all, as you will quickly find out, I believe that everything is economics!
6.1. Demand and Supply Conclusion
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從本節課中
Supply and Demand
Welcome to your second week in Microeconomics Principles! This module we will cover the hallmark framework of the field: the supply and demand model. I am sure that if you knew any economics words before enrolling in this course those two words were supply and demand. This module you will finally learn what all the fuss is about.
與講師見面
Dr. José J. Vázquez-CognetClinical Professor
Department of Economics
>> [SOUND] Okay, so at the beginning of this week, we posed the following question,
why is it that >> vegetables in the farmer's market
are usually, are more expensive than the same vegetables when you buy them at a
big grocery store probably just down the street from the farmer's market.
>> And let's see if we can use the model of supply and demand we introduced
this week to kind of answer that question.
>> Well we can probably have two explanations.
>> And for the first explanation, let's go back to the, farmer's market
>> and what the director of the farmers market has to say about that,
>> because she gives a very good intuitive explanation, and then we come
back here and see how that looks in the supply and demand market.
>> Well, there's a whole host of things that consumers are benefiting from with
the farmer's market. >> Again, that relationship between the
farmer and the consumer goes both ways. >> Consumers get to find out how their
food was raised, how to prepare their food.
>> I mean, I, there's a lot of confusing looking vegetables out here
sometimes. >> So you might, you have to ask the,
the grower. They eat it. They eat what they grow.
>> So they know, , they know what >> Preparation methods are the best.
>> Like kale. >> You know a lot of people are like,
kale, kohlrabi, what do I do with that? >> So, you know, having that one to one
relationship is I think, is, is really primary.
>> I think being able to buy food locally that's, that's grown within the
state of Illinois. It doesn't travel as far, so it's good for the environment.
>> So this is more of, less tangible thing and more like long term sort of
thing. >> It's better for the environment, the
lighter carbon footprint. >> it's really good for the local
economy, where you live. >> The money's staying in the
community, which is also >> a really big deal.
>> A lot of people are getting more interested in shopping locally, and if
you're coming to a farmer's market you are definitely doing that.
>> I mean every, most people who are here are from within 100 miles, so you
are keeping money in Champaign-Urbana, in Champaign County, or in the surrounding
region. >> So there's a lot, but really also,
the main thing I think that people come here for, is the freshness and the taste
of the produce. >> You can't beat it.
>> I mean, >> eating here at the market,
>> shopping here for your week's produce,
>> you're going to have, by far, the freshest, best tasting, it's in season.
>> It's the best produce anywhere. >> We have some of the best soil in the
entire world right here, >> and these vegetables are growing on
it. >> They're fantastic.
>> Very well. >> So what she basically is saying is
that the reasons, >> the price of the vegetables in the
farmer's market are more expensive, >> it's simply because people value
buying the, the the vegetables at the farmer's market, for whatever reason.
>> They think they're fresher. >> They like the interaction with the
actual farmer. >> They might actually like to talk to
other people. >> I go to farmer's market all the
time. >> I can bring my dog I can talk to
other people. >> My dog can play with other dogs.
>> The kids can play. >> So there's a certain value you get
in the farmer's market that is just different from the value you get in the
grocery store. >> Since consumers value the, that
experience a little more than the grocery store, you can expect the prices to
reflect that. So how does that look in the, in the
model? Well, basically, what we're saying is
that, if we assume we have a demand, initial demand, you can say that maybe
this is the demand, D1, of four consumers that go to the grocery store.
But the demand for the tomatoes at the farmer's market, it's really a lot more,
>> because they value those tomatoes a lot more.
>> So the demand curve is actually for the tomatoes at the farmers market is
actually to the right of that initial demand and the price of those tomatoes
would actually be higher >> [SOUND]
>> than the price of the tomatoes in the grocery store.
>> That's a very simple explanation, >> simply saying that there's, there's
just more people following that, those tomatoes.
>> And there are lines. >> So that,
>> At, at, at the farmer's market will be longer than the lines at the, at the
grocery store. >> So that could be one explanation.
>> it doesn't have to be the explanation,
>> but the model actually is useful >> to actually explain why would that
be the case. >> So that is a, a consumerist
explanation, a buyer's side of the market explanation as to why there's a
difference between the price in the farmer's market and the price at the
grocery store. >> Now let's say, if we can, if we give
a, a >> seller's explanation, farmer's
explanation, as to why the price of tomatoes is higher at the farmer's market
than at the grocery store. >> And for that we don't have
documentary video, but we actually can make the intuitions ourself.
>> What if the change in the prices at the farmers market from the prices at the
grocery store is simply because it costs different to provide the tomatoes at the
farmers market. >> Now why would it cost different to
produce. >> To farmers to provide the tomatoes
at the farmers market. >> Well, perhaps it's because the
farmers at the farmers market are small growers that use different technologies.
>> Perhaps they can not take advantage of large scale technologies of tractors
or any kind of technologies. >> We can expect the more, the larger
your operation is, the lower, the lower your cost because you can take advantage
of, of economical scale, like of the fact its just it just bigger to actually grow
the things. >> So I mean that's some of the reasons
why prices are big retailers like Walmart are usually lower
>> than prices of small retailers, is because you can take advantage of, of
cost saving technologies if you have a big operation that can warranty, warranty
you for actually buy those technologies, than if you are a small farmers.
>> In the, I think in one of the cases you talked to, you heard from 1 of the
farmers, that he basically grow the things
>> You know, pick up the things himself from the farm and he doesn't actually do
big tractors or things of that sort. >> So when that is the case it will be
a lot more expensive, to actually deliver those tomatoes to the farmers, to the
farmers market >> because, you know, you're not taking
advantage of big technologies that could save you money to, to grow the tomatoes.
>> So one of the reasons why it costs more to buy tomatoes at the farmer's
market simply be, is simply because it costs more.
>> Those tomatoes were more expensive to produce.
>> Right? Now, we can see that in the model, too.
>> And that will be not very difficult to see.
>> the, if we assume that S1 is really the cost of tomatoes to supply that,
>> that shows the cost of tomatoes that are at the grocery store.
>> We just said that at the farmer's market, the cost is a little more, so
that means that the supply of tomatoes at the farmer's market will be a lot to the
left of the tomatoes at the grocery store.
>> And that means that the price of tomatoes at the farmer's market will
probably going to be higher >> than the price of tomatoes at the
grocery store. >> So again, these are answers that,
that to which you can actually answer correctly.
>> The model provides a good solution. >> I think the moral of the story for
you is that the power of the model of supply and demand is that it forces you
to organize your >> thinking, to answer any questions.
>> And the more difficult the questions and the more connections you have, the
more useful the model is going to be because the easier it's going to be for
you to get confused, if you have to think this in your head.
>> And the, the better you are at keeping your work organized, to answer
your >> questions.
>> You have a lot of practice questions this week, and we have a very interesting
discussion on the discussion this week, >> which is not about a particular
good, but how to use the model supply and demand to determine what happens to the
power that women or men have in their relationship to the gender,
>> powers, and how more or less men or women in the relationship market changes
the power they have. >> we can use the supply and demand
model to actually evaluate those questions still, which which we
traditionally don't associate with, with economics.
>> This is the hallmark model of the course, this is the model we will use
throughout the course. >> it is the hallmark model of any
economic code. >> You have to learn it very well for
you to take benefit of anything else. >> We will afterward spend your time
this week, and it will definitely pay off in the following weeks.
>> Produced by OCE Atlas Digital Media at the University of Illinois Urbana
Champaign.
