ECON 1BB3 Lecture 4: ECON 1BB3 Week 4 Lecture

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Chapter 4: factors that shift demand, factors that shift supply, difference between a change in quantity demanded (supplied) and demand (supply) . Change in income only changes the demand curve. It causes a movement along the supply curve. They aren"t able to move the supply curve because they did not increase tech, labour etc. they are just producing more supplies but along the supply curve. Stock/flow examples: investment, capital stock; saving (flow- this gets added to household wealth), wealth (household stock); Week 3- questions: when the price changes you move along of the demand curve. The bacon is falling because the prices are going up. We know that the price of pencils has fallen, either due to new technology . An example of perfect substitutes are that tap water from my house or tap water from another house. Pens and pencils are substitutes but not perfect substitutes. They are related because they are both used to write.