Week 2 Discussion Feedback

Module 12 Feedback- Module 12 has to do with total surplus in the market. You know that total surplus equals consumer plus producer surplus. When the market is in equilibrium, total surplus is maximized. Textbook prices have skyrocketed over the years. Textbook publishers have certainly taken advantage of producer surplus. Recall that when textbook prices increase, producer surplus also increases. The opposite is true for consumer surplus. When textbook prices increase, consumer surplus decreases for students. It is wise to shop around for cheaper prices on the internet. College bookstores must accept the price of the textbook from the publisher, and then charge more on top of the publisher price in order to make a profit. Students who use financial aid to purchase their textbooks are forced to use the college bookstores and therefore must pay the bookstore prices. New editions of textbooks come out every year. I make a point to use the same edition for at least 2-3 years. In addition, I use the same textbook for both Micro and Macroeconomics.

Module 20 Feedback- Utility is a measure of the satisfaction the consumer derives from consumption of goods and services. I am 100% gluten free, but I can eat 3-4 slices of gluten free pizza. I begin to feel full right after the first slice is consumed. Marginal utility (the change in total utility divided by the change in quantity) starts to decrease right after the first slice. Total utility is highest at the first slice of pizza. The law of diminishing marginal utility tells us that each additional slice of pizza consumed adds less and less to total utility.

Module 18/52 Feedback- The cost of going to college has certainly increased overtime, but college is still very much affordable at in State Colleges, and Universities. For instance, SCF has not increased tuition cost in years. The perceived benefit of going to college still outweighs the cost for students. What has become unaffordable (even unattainable) is the cost of college at Ivy League schools that can easily cost $80,000-$100,000 a year including everything. Students graduating from out of state colleges and universities, both public and private are graduating from college with severe debt, especially students graduating from Ivy League schools. There are many costs of going to college, both explicit and implicit. Keep in mind that ALL cost are opportunity cost. Explicit cost would be tuition, books/supplies, gas money, food money, student fees etc. Implicit cost refer to the cost of foregone missed opportunities such as earning a full or part-time salary at a job.

Module 18 continued/53 Feedback- Marginal Analysis is used to find out when Profit for a firm is maximized. Marginal means looking at the change in something, to see what happens when I add one more unit of something. Marginal Revenue is the change in Total Revenue divided by the change in Output or Quantity. Marginal Cost is very similar. Marginal Cost is the change in Total Cost divided by the change in Output or Quantity. Profit is maximized when Marginal Revenue equals Marginal Cost for a firm. The optimal output rule is used for profit maximization for all market structures.