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[intro_supply_demand] Update spellings and example admonitions #543

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22 changes: 15 additions & 7 deletions lectures/intro_supply_demand.md
Original file line number Diff line number Diff line change
Expand Up @@ -33,7 +33,7 @@ Exports were regarded as good because they brought in bullion (gold flowed into

Imports were regarded as bad because bullion was required to pay for them (gold flowed out).

This [zero-sum](https://en.wikipedia.org/wiki/Zero-sum_game) view of economics was eventually overturned by the work of the classical economists such as [Adam Smith](https://en.wikipedia.org/wiki/Adam_Smith) and [David Ricado](https://en.wikipedia.org/wiki/David_Ricardo), who showed how freeing domestic and international trade can enhance welfare.
This [zero-sum](https://en.wikipedia.org/wiki/Zero-sum_game) view of economics was eventually overturned by the work of the classical economists such as [Adam Smith](https://en.wikipedia.org/wiki/Adam_Smith) and [David Ricardo](https://en.wikipedia.org/wiki/David_Ricardo), who showed how freeing domestic and international trade can enhance welfare.

There are many different expressions of this idea in economics.

Expand Down Expand Up @@ -68,6 +68,9 @@ Before we look at the model of supply and demand, it will be helpful to have som

### A discrete example

```{prf:example}
:label: isd_ex_cs

Regarding consumer surplus, suppose that we have a single good and 10 consumers.

These 10 consumers have different preferences; in particular, the amount they would be willing to pay for one unit of the good differs.
Expand All @@ -79,6 +82,7 @@ Suppose that the willingness to pay for each of the 10 consumers is as follows:
| willing to pay | 98 | 72 | 41 | 38 | 29 | 21 | 17 | 12 | 11 | 10 |

(We have ordered consumers by willingness to pay, in descending order.)
```

If $p$ is the price of the good and $w_i$ is the amount that consumer $i$ is willing to pay, then $i$ buys when $w_i \geq p$.

Expand Down Expand Up @@ -253,6 +257,9 @@ Let $v_i$ be the price at which producer $i$ is willing to sell the good.

When the price is $p$, producer surplus for producer $i$ is $\max\{p - v_i, 0\}$.

```{prf:example}
:label: isd_ex_dc

For example, a producer willing to sell at \$10 and selling at price \$20 makes a surplus of \$10.

Total producer surplus is given by
Expand All @@ -273,6 +280,7 @@ p = 2 q^2
$$

The shaded area is the total producer surplus in this continuous model.
```

```{code-cell} ipython3
---
Expand Down Expand Up @@ -351,7 +359,7 @@ Many of these rules relate to one of the most beautiful and powerful results in

We will not try to cover these ideas here, partly because the subject is too big, and partly because you only need to know one rule for this lecture, stated below.

If $f(x) = c + \mathrm{d} x$, then
If $f(x) = c + dx$, then

$$
\int_a^b f(x) \mathrm{d} x = c (b - a) + \frac{d}{2}(b^2 - a^2)
Expand Down Expand Up @@ -670,7 +678,7 @@ This is the competitive equilibrium quantity.
Observe that the equilibrium quantity equals the same $q$ given by equation {eq}`eq:old1`.

The outcome that the quantity determined by equation {eq}`eq:old1` equates
supply to demand brings us a **key finding:**
supply to demand brings us a *key finding*:

* a competitive equilibrium quantity maximizes our welfare criterion

Expand All @@ -689,11 +697,11 @@ Our generalizations will extend the preceding analysis of a market for a single

In addition

* we'll derive **demand curves** from a consumer problem that maximizes a
**utility function** subject to a **budget constraint**.
* we'll derive *demand curves* from a consumer problem that maximizes a
*utility function* subject to a *budget constraint*.

* we'll derive **supply curves** from the problem of a producer who is price
taker and maximizes his profits minus total costs that are described by a **cost function**.
* we'll derive *supply curves* from the problem of a producer who is price
taker and maximizes his profits minus total costs that are described by a *cost function*.

## Exercises

Expand Down