Economics Quick Review: Mixed Economy, Market Power, and Demand

US is a mixed economy: private market with government intervention.
Government levers include taxation to raise revenue and transfers to raise living standards; there can be inefficiencies but redistribution is a goal.
Enforcement of property rights is essential; violence is a mechanism to defend those rights when necessary.
De Beers example (diamonds): historical diamond market monopoly; illustrates market power and its implications for mobility and distribution.

Monopoly: one seller, many buyers; price maker; contrasts with perfect competition.
De Beers historically controlled diamond supply; demonstrates how market power can shape outcomes.
Social mobility: climbing the economic ladder; influenced by market structure and policy.

Law of Demand: $P \uparrow \Rightarrow Qd \downarrow$ ; $P \downarrow \Rightarrow Qd \uparrow$ .
Distinctions:
- Demand: the entire relationship between price and quantity demanded; represented by the demand curve.
- Quantity demanded: the specific amount demanded at a given price; a point on the demand curve.
Movement vs Shift:
- Price changes cause movement along the demand curve (change in $Q_d$ ).
- Non-price factors cause the entire demand curve to shift (change in demand).
Bud Light example:
- If the price increases, quantity demanded falls (movement along the curve).
- If the price decreases, quantity demanded rises.
Shifts (non-price factors):
- An increase in demand shifts the curve to the right: $D1 \to D2$ .
- A decrease shifts the curve to the left: $D1 \to D3$ .