on 08-Dec-2016 (Thu)

the supply function , depends on the price at which the good can be sold as well as the cost of production for an additional unit of the good. The greater the difference between those two values, the greater is the willingness of producers to supply the good.

At its simplest level, production of a good consists of transforming inputs, or factors of production (such as land, labor, capital, and materials) into finished goods and services. Economists refer to the “rules” that govern this transformation as the technology of production . Because producers have to purchase inputs in factor markets, the cost of production depends on both the technology and the price of those factors.

Clearly, willingness to supply is dependent on not only the price of a producer’s output, but also additionally on the prices (i.e., costs) of the inputs necessary to produce it. For simplicity, we can assume that the only input in a production process is labor that must be purchased in the labor market. The price of an hour of labor is the wage rate, or W. Hence, we can say that (for any given level of technology) the willingness to supply a good depends on the price of that good and the wage rate.

This concept is captured in the following equation, which represents an individual seller’s supply function:

Equation (7) 

Qsx=f(Px,W,…)

where Qsx is the quantity supplied of some good X, such as gasoline, P_x is the price per unit of good X, and W is the wage rate of labor in, say, dollars per hour. It would be read, “The quantity supplied of good X depends on (is a function of) the price of X (its “own” price), the wage rate paid to labor, etc.”

Qsx=−175+250Px−5W

Notice that this supply function says that for every increase in price of $1, this seller would be willing to supply an additional 250 units of the good. Additionally, for every $1 increase in wage rate that it must pay its laborers, this seller would experience an increase in marginal cost and would be willing to supply five fewer units of the good.

The graph of the inverse supply function is called the supply curve , and it shows simultaneously the highest quantity willingly supplied at each price and the lowest price willingly accepted for each quantity.

a change in the (own) price of a product causes a change in the quantity of that good willingly supplied. A rise in price typically results in a greater quantity supplied, and a lower price results in a lower quantity supplied. Hence, the supply curve has a positive slope, in contrast to the negative slope of a demand curve. This positive relationship is often referred to as the law of supply .

Aggregating Supply Functions

An individual seller’s monthly supply of downloadable e-books is given by the equation

Qseb=−64.5+37.5Peb−7.5W

where Qseb is number of e-books supplied, P_eb is the price of e-books in euros, and W is the wage rate in euros paid by e-book sellers to laborers. Assume that the price of e-books is €10.68 and wage is €10. The supply side of the market consists of a total of eight identical sellers in this competitive market.

1. Determine the market aggregate supply function.

2. Determine the inverse market supply function.

3. Determine the slope of the aggregate market supply curve.

Solution to 1:

Aggregating supply functions means summing up the quantity supplied by all sellers. In this case, there are eight identical sellers, so multiply the individual seller’s supply function by eight:

Qseb=8(−64.5+37.5Peb−7.5W)=−516+300Peb−60W

Solution to 2:

Holding W constant at a value of €10, insert that value into the aggregate supply function and then solve for P_eb to find the inverse supply function:

Q_eb = –1,116 + 300P_eb

Inverting, P_eb = 3.72 + 0.0033Q_eb

Solution to 3:

The slope of the supply curve is the coefficient on Q_eb in the inverse supply function, which is 0.0033.

An important concept in the market model is market equilibrium , defined as the condition in which the quantity willingly offered for sale by sellers at a given price is just equal to the quantity willingly demanded by buyers at that same price. When that condition is met, we say that the market has discovered its equilibrium price. An alternative and equivalent condition of equilibrium occurs at that quantity at which the highest price a buyer is willing to pay is just equal to the lowest price a seller is willing to accept for that same quantity

An important concept in the market model is market equilibrium , defined as the condition in which the quantity willingly offered for sale by sellers at a given price is just equal to the quantity willingly demanded by buyers at that same price.

Algebraically, we can find equilibrium price by setting the demand function equal to the supply function and solving for price. Recall that in our hypothetical example of a local gasoline market, the demand function was given by Qdx=f(Px,I,Py) , and the supply function was given by Qsx=f(Px,W)

behavioral equations because they model the behavior of, respectively, buyers and sellers.

Variables other than own price and quantity are determined outside of the demand and supply model of this particular market. Because of that, they are called exogenous variables . Price and quantity, however, are determined within the model for this particular market and are called endogenous variables

In our example, there are three exogenous variables (I, P_y, and W) and three endogenous variables: P_x, Qdx , and Qsx .

Hence, we have a system of two equations and three unknowns. We need another equation to solve this system. That equation is called the equilibrium condition , and it is simply Qdx=Qsx .

Note that our system of equations requires explicit values for the exogenous variables to find a unique equilibrium combination of price and quantity. Conceptually, the values of the exogenous variables are being determined in other markets, such as the markets for labor, automobiles, and so on, whereas the price and quantity of gasoline are being determined in the gasoline market.

When we concentrate on one market, taking values of exogenous variables as given, we are engaging in what is called partial equilibrium analysis

In many cases, we can gain sufficient insight into a market of interest without addressing feedback effects to and from all the other markets that are tangentially involved with this one. At other times, however, we need explicitly to take account of all the feedback mechanisms that are going on in all markets simultaneously. When we do that, we are engaging in what is called general equilibrium analysis .

To reach equilibrium, price must adjust until there is neither an excess supply nor an excess demand. That adjustment is called the market mechanism , and it is characterized in the following way: In the case of excess supply, price will fall; in the case of excess demand, price will rise; and in the case of neither excess supply nor excess demand, price will not change.

Note that there are two combinations of price and quantity that would equate quantity supplied and demanded, hence two equilibria. The lower-priced equilibrium is stable, with a positively sloped supply curve and a negatively sloped demand curve. However, the higher-priced equilibrium is unstable because at a price above that equilibrium price there would be excess demand, thus driving price even higher. At a price below that equilibrium there would be excess supply, thus driving price even lower toward the lower-priced equilibrium, which is a stable equilibrium.

Observation suggests that most markets are characterized by stable equilibria. Prices do not often shoot off to infinity or plunge toward zero. However, occasionally we do observe price bubbles occurring in real estate, securities, and other markets. It appears that prices can behave in ways that are not ultimately sustainable in the long run. They may shoot up for a time but ultimately, if they do not reflect actual valuations, the bubble can burst resulting in a “correction” to a new equilibrium.

This is price bubbles, buyers and sellers base their expectations of future prices: if price rises, they take that as a sign that price will rise even further.

If buyers see an increase today, they shift the demand curve to the right, desiring to buy more today because they think they would pay more in the future.

Sellers at the same time see an increase in today’s price and think that price will be even higher in the future, they don't sell today holding out for higher prices tomorrow, and that would shift the supply curve to the left.

With a rightward shift in demand and a leftward shift in supply, buyers’ and sellers’ expectations about price are confirmed and the process begins again. This scenario could result in a bubble that would inflate until someone decides that such high prices can no longer be sustained. The bubble bursts and price plunges.

Sometimes markets really do use auctions to arrive at equilibrium price. Auctions can be categorized into two types depending on whether the value of the item being sold is the same for each bidder or is unique to each bidder.

The first case is called a common value auction in which there is some actual common value that will ultimately be revealed after the auction is settled. Prior to the auction’s settlement, however, bidders must estimate that true value. An example of a common value auction would be bidding on a jar containing many coins. Each bidder could estimate the value; but until someone buys the jar and actually counts the coins, no one knows with certainty the true value.

In the second case, called a private value auction , each buyer places a subjective value on the item, and in general their values differ. An example might be an auction for a unique piece of art that buyers are hoping to purchase for their own personal enjoyment, not primarily as an investment to be sold later.

Perhaps the most familiar auction mechanism is the ascending price auction in which an auctioneer is selling a single item in a face-to-face arena where potential buyers openly reveal their willingness to buy the good at prices that are called out by an auctioneer. The auctioneer begins at a low price and easily elicits nods from buyers.

Another Dutch auction variation, also involving a single price and called a single price auction , is used in selling US Treasury securities.6The single price Treasury bill auction operates as follows: The Treasury announces that it will auction 26-week T-bills with an offering amount of, say, $90 billion with both competitive and non-competitive bidding. Non-competitive bidders state the total face value they are willing to purchase at the ultimate price (yield) that clears the market (i.e., sells all of the securities offered), whatever that turns out to be. Competitive bidders each submit a total face value amount and the price at which they are willing to purchase those bills. The Treasury then ranks those bids in ascending order of yield (i.e., descending order of price) and finds the yield at which the total $90 billion offering amount would be sold. If the offering amount is just equal to the total face value bidders are willing to purchase at that yield, then all the T-bills are sold for that single yield. If there is excess demand at that yield, then bidders would each receive a proportionately smaller total than they offered.

is there some reasonable measure we can apply to the outcome of a competitive market that enables us to say whether that outcome is socially desirable? Economists have developed two related concepts called consumer surplus and producer surplus to address that question. We will begin with consumer surplus, which is a measure of how much net benefit buyers enjoy from the ability to participate in a particular market.

To get an intuitive feel for this concept, consider the last thing you purchased.

Whatever it was, think of how much you actually paid for it.

Now contrast that price with the maximum amount you would have been willing to pay for it instead of going without it altogether. If those two numbers are different, we say you received some consumer surplus from your purchase. You received a “bargain” because you were willing to pay more than you had to pay.

recognize that the demand curve can thus be considered a marginal value curve because it shows the highest price consumers are willing to pay for each additional unit. In effect, the demand curve is the willingness of consumers to pay for each additional unit.

Graphically, this measure translates into the area under the consumer’s demand curve, up to and including the last unit consumed

consumer surplus , and it is defined as the difference between the value that the consumer places on a good and the amount of money that was required to pay for it

producer surplus . It is the difference between the total revenue sellers receive from selling a given amount of a good, on the one hand, and the total variable cost of producing that amount, on the other hand. Variable costs are those costs that change when the level of output changes. Total revenue is simply the total quantity sold multiplied by the price per unit.

The total variable cost (variable cost per unit times units produced) is measured by the area beneath the supply curve, and it is a little more complicated to understand. Recall that the supply curve represents the lowest price that sellers would be willing to accept for each additional unit of a good. In general, that amount is the cost of producing that next unit, called marginal cost

we can interpret the marginal cost curve as the lowest price sellers would accept for each quantity, which basically means the marginal cost curve is the supply curve of any competitive seller.

MAPA CONCEPTUAL INTRODUCCIÓN AL ESTUDIO DEL DERECHO DERECHO Y LAS NORMAS JURÍDICAS EL DERECHO COMO CIENCIA HECHOS Y ACTOS JURÍDICOS

EL DERECHO Y LAS NORMAS JURÍDICAS OBJETIVO

El alumno conocerá la definición del Derecho, así como la clasificación de las normas jurídicas en general y el orden jurídico de éstas en México. Además comprenderá cuáles deben ser las normas éticas que todo abogado implementará en su desarrollo profesional.

La palabra Derecho, proviene del latín directum que significa “dirigir”, “encaminar”. Este concepto va enfocado a educar al hombre en su ámbito social, y a estudiar su conducta. En ese sentido, se crearon normas de castigo o sanción que garantizarán una convivencia correcta entre los individuos.

El Derecho, desde el punto de vista doctrinario, es el conjunto de normas jurídicas que regulan la conducta del los hombres en sociedad.

2

El deber es la obligación que toda persona tiene que cumplir para realizar un mandato, dicho en otras palabras, es el hacer o no hacer una determinada conducta, de lo contrario se aplicará una sanción.

La distinción clara del deber y derecho, es que el primero es una forma de conducta y el Derecho es la exigencia; un ejemplo claro sería el deber que tengo de pagar un impuesto y mi derecho es el que con el pago de mi impuesto el Estado me proporcione de servicios públicos

El Derecho positivo es el derecho en vigor, el que se practica y que se aplica a diario en los casos individuales que se presenten en la sociedad

desde el punto de vista jurídico, el deber jurídico, es la necesidad para aquellos a quienes va dirigida una norma del derecho positivo 1 de prestarle voluntario acatamiento, adaptando a ella su conducta, en obediencia a un mandato que, en caso de incumplimiento, puede ser hecho efectivo mediante la coacción

El deber jurídico es una obligación jurídica. Dicho en otras palabras, el deber jurídico es aquella conducta contraria al hecho ilícito o antijurídico, por ejemplo, si el hecho ilícito es el no pago o incumplimiento de una obligación, el deber jurídico comprende la conducta contraria, es decir, el pago o cumplimiento de la obligación. Los deberes jurídicos no deben ser confundidos con la conducta moral ni religiosa, ya que éstos presuponen siempre la existencia de una norma jurídica que se manifiesta en las siguientes direcciones: 1) Debe de cumplir el mandato concreto contenido en la norma. 2) Debe de no obstaculizar su cumplimiento.

En conclusión, el deber es simplemente el carácter obligatorio de las exigencias morales y el deber jurídico es la presión que el Estado impone para el cumplimiento de una norma que tiene carácter sancionador, tan es así que el hombre debe acatar determinados mandatos para cumplir los requerimientos normativos, de lo contrario se verá sancionado por el incumplimiento a tal deber.

las normas en general derivan del Derecho natural y de éste resultan o emanan las leyes naturales y las leyes sociales,

el Derecho depende de la norma, de la sanción que el Estado impone a los ciudadanos para la convivencia en sociedad

Las normas se clasifican en normas morales, religiosas, sociales y jurídicas.

La palabra norma suele usarse en dos sentidos: uno amplio (Latu sensu), y otro estricto (Stricto sensu),

en sentido amplio, es aplicado a toda regla de comportamiento humano, sea obligatoria o no obligatoria, y se clasifica en dos grandes grupos: normas técnicas y éticas

Las normas éticas comprenden a las morales, la costumbre, el trato social, las jurídicas, la religión

las normas técnicas son las reglas que sirven a la persona para la realización material de un objeto, no son de carácter obligatorio sino potestativo; en sentido estricto, corresponde a que impone deberes o confiere derechos.

Latu sensu: Regla de comportamiento obligatoria o no.

Stricto sensu: Establecen deberes y otorga derechos.