Importance of Supply-Demand Analysis A little knowledge goes a long way: Price Control, Taxation and other policies. Market welfare: Normative Analysis International Trade Externality (Market Failure) Market Power (Market Failure) Other markets: Financial Market, Labor Market. Macroeconomics

Elasticity… … is a measure of how much buyers and sellers respond to changes in market conditions … allows us to analyze supply and demand with greater precision

The Market Forces of Supply and Demand Supply and Demand are the two wordsthat economists use most often. Supply and Demand are the forces thatmake market economies work. Modern microeconomics is about supply,demand and equilibrium

Interdependence and Trade Consider your typical day: – You wake up to a alarm clock made in Wenzhou – You put on some clothes made of cotton grown in Xinjiang and sewn in factories in Fujian Province

Outline The Economist as Scientist The Economist as Policy Adviser Why Economists disagree

A firm, using two inputs K and L to produce one product, whose production function is 2 / 5 3/ 5 Q = 25L K

Outline The economics of asymmetric information Political economics Behavioral economics

对外经济贸易大学：《金融经济学导论》课程教学资源（课件讲稿）第一章 金融经济学的研究主题

对外经济贸易大学：《金融经济学导论》课程教学资源（试卷习题）第一章 金融经济学研究主题 Introduction of Financial Economics

The Theory of Consumer Choice The theory of consumer choice addresses the following questions: – Do all demand curves slope downward? – How do wages affect labor supply? – How do interest rates affect household saving?