Excel Workbooks
Each of the Excel workbooks listed below contains at least
three worksheets: an Instructions page; one or more Workbooks;
and one or more sets of Questions designed to help you explore
the model. If you are not comfortable with downloading a
document from the Web, or have never downloaded an Excel
file from the Web, then read over the Instructions
for downloading the Excel workbooks. To download a copy
of the Excel workbook to your computer, click on one of
the workbook titles shown below.
A buyer's reservation price is the maximum price he or
she is willing to pay for a quantity of a good. A seller's
reservation price is the minimum price he or she is willing
to accept in payment for a quantity of a good. This workbook
looks at how buyers and sellers, focusing only on their
reservation prices, can, in the context of a market, produce
an outcome that brings the most benefit to society. (Note:
The file contains simple Macros; if asked, tell Excel
to "Enable Macros".)
This workbook reviews how supply and demand interact
to determine the market price and quantity of a good or
service. It also reviews how changes in factors underlying
demand and supply lead to changes in market prices and
quantities. The impact of government-set price controls
on a market is also examined. (Note: The file contains
a simple Macro; if asked, tell Excel to "Enable
Macros".)
This workbook extends the discussion of supply and demand,
exploring issues pertaining to a buyer's or seller's responsiveness
to a change in price. Elasticity is the name given to
a measure of this responsiveness.
This workbook has three parts, corresponding to each
of the three worksheets in this workbook. The first part
explores the nature of consumer preferences as modeled
by indifference curves. The second part explores the constraint
imposed on consumers by their income and the prices of
the goods they buy. This constraint is modeled by a budget
line. The third part of the workbook explores how a commodity
bundle is chosen by a consumer who seeks to maximize the
satisfaction received from the bundle of goods given a
budget constraint. If you are not familiar with Excel's
Solver add-in, read over these instructions
before downloading the workbook.
In this workbook you will vary the price of Food (keeping
income and the price of clothing constant) and find how
the consumer choice model can be used to uncover the consumer's
demand curve for food. Then you will vary income (keeping
prices constant) to see how that demand curve shifts.
If you are not familiar with Excel's Solver add-in, read
over these instructions
before downloading the workbook.
In this workbook we combine information on a firm's production
technology with the prices of factor inputs to determine
the firm's costs of production. With that information
we can explore how a firm decides how to produce -- how
many units of each input to employ. We define the optimal
combination of factor inputs as the combination that produces
a given level of output at a minimum cost. If you are
not familiar with Excel's Solver add-in, read over these
instructions before downloading
the workbook.
Now we turn to another fundamental problem faced by a
firm; What quantity should be produced? In this workbook
we will see how a perfectly competitive firm chooses the
level of output that maximizes profit. We also explore
how the output choices of an individual firm lead to a
supply curve for the entire perfectly competitive market.
This workbook extends the analysis of profit-maximization
by competitive firms. Now we can explore how changes in
market demand and supply affect the firm in both the short
run and the long run, under different assumptions about
the cost structure of the industry. (Note: The file contains
a simple Macro that I cannot seem to get rid of! If asked,
tell Excel to "Enable Macros".)
In the previous workbook, the profit-maximizing firm
took the market price as given in deciding how much to
produce and offer for sale. In markets with one or even
many (as opposed to thousands) of firms, each firm has
some control over the price. As a result of this "price-setting
power", the profit-maximizing price and output will
differ from what would prevail in a perfectly competitive
market.
Labor/Leisure Choice [Under
construction]
This workbook has three parts, corresponding to each
of the three worksheets in this workbook. The first part
explores the nature of worker preferences for leisure
and income as modeled by indifference curves. The second
part explores the constraint imposed on workers by their
non-wage income and the wages they are paid. This constraint
is modeled by a budget line. The third part of the workbook
explores how the optimum number of leisure hours is chosen
by a worker who seeks to maximize the satisfaction received
from a combination of leisure and income. If you are not
familiar with Excel's Solver add-in, read over these instructions
before downloading the workbook.
This workbook explores the model of a wage-taking firm
in a perfectly competitive labor market. In it, you will
explore how changes in product demand, worker productivity,
and the number of product sellers, affects the wage rate
set by the market, and the profit-maximizing number of
workers hired by the firm and in the market.
In the previous workbook, the labor-hiring firm took
the market wage as given in deciding how many workers
to hire. In labor markets with only one firm hiring labor,
that firm has some control over the wage rate paid workers.
As a result of this "wage-setting power", the
profit-maximizing wage and number of workers hired will
differ from what would prevail in a perfectly competitive
labor market.
In this workbook you will explore the interactions between
a perfectly competitive product market and a perfectly
competitive labor market. It is designed to let you explore
how, in a competitive market system, everything is connected
to everything else.
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