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MBA


Car sales:   
Deal
Never ask how much money you have

Customer side:
1) if you can't knock the price of a car down 2k$ be respectful but walk away the fleet rate is a given if you know what your doing, as well as the hold over charge which varies between manufacturers . 2) do not buy from the same manufacture for the sake of it . 3) stay away from popular choices 4) the dealer needs you ,you do not need any particular dealership. 5) always go to the dealer at the end of the month you will find one that will reduce the price. I have bought vehicles with 20k$ discounts on them because I followed 1through 5 and kept at until I found a dealer that needed the sale to make his months commitments. cars are predominantly steel and plastic both of which amount to low prices. but manufacturers and dealers have been taking advantage of stupid people .  When they are not making money due to slow sales and at the end of the month is the time to hit the dealer up for a further 2000$ rebate above any rebates offered by any manufacturer.



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We have a budget and can focus on either of the axes. below the curve is inefficient area where resources can be better used to increase each of the axes, the outside of curve is infeasible and not possible based on current resources of either

Supply/demand curve

To
large tax on inheritance to break the chain of inheritance

large tax on high incomes

 Failures of Market Economy
 Government intervention
 Current Examples of Government policy
 Inefficiencies:  
 Monopoly Encourage competition
anti-trust laws, deregulation
 Externalities intervene in markets
 anti-pollution laws, anti-smoking ordinances
 Public goods
 encourage beneficial activities
 building light houses, subsidize scientific research
   
 Inequality:  
 Unacceptable inequalities of
income and wealth
 Redistribute income
income-support programs
 progressive taxation of income and wealth (e.g. food stamps)
   
 Macroeconomic problems:
  
 Business cycles (high inflation and unemployment)
 stabilie through macroeconomic policies
 Monetary policies
 slow economic growth
stimulate growth
 Fiscal policies invest in education
Raise national savings rate by reducing budget deficit



Price elasticity: If a small change in price is accompanied by a large change in quantity demanded
intellectual forefather of microeconomics: Adam Smith in 1700s : free market and market competition
Adam Smith’s vision of a perfectly competitive marketplace delivering goods and services at lowest price and highest quality.

Oligopolies are industries which typically have:A small number of large firms.


ceteris paribus /keteris parabis/ means "holdin other things equal" (shift parameters)
the lower the price, ceteris paribus, the more units a consumer will demand
and the higher the price, ceteris paribus, the less consumer will demand
why?
substitute effect: as the price of beef rises I eat more chicken
income effect (my purchssing power declines)





if hte price is too much and companies. manufacture X units but demand is Y units, there is a surplus of X - Y. So comaies keep lowering their prices so there is no more surplus
similar holds for shortage.

Very interesting supply demand examples

we do what we do and we buy what we buy because it makes us feel good
consumer choice boils down to three things:
1. the pleasure people get from consuming a good
2. the price they have to pay for it
3. the budget available to them

Marginal utility is the additional utility derived from a one unit increase in consumption
the marginal utility falls as we increase consumption: Law of diminishing marginal utility

utility maximizing rule or equimarginal principle

Marginal utility / Price.   -> marginal utility per price of that good

nominal income is the balance in the bank, real income is nominal income when adjusted for inflation


p is price


in which market is hte product most elastic. small change in price in big change in buying behavior:



checkout total cost and marginal cost with similar labor



Average fixed cost, average variable cost per unit output










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