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ECN 104 Lecture Notes - Lecture 3: Complementary Good, Kraft Dinner, Inverse Relation

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coffeescorpion370

24 Oct 2017

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Ryerson University

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Document Summary

2017-09-19 3:14:00 pm: market is an interaction between buyers and sellers, does not have to be a physical space, local, national, international, price is discovered in the interactions of the buyers and sellers. Demand: schedule (table) or curve, amount consumers are willing and able to purchase at a given price, during a specified period of time, other things equal, individual demand, market demand. Steak: inferior goods, good that when you earn more you buy less (ex. Kraft dinner: change in prices of related goods, complementary goods, one that is used together with another good (ex. Demand for coffee decreases, demand for cream decreases: substitute goods, one that can be used in place of another good (ex. Price of coffee increases, demand of tea increases, causes a shift to the right: change in quantity demanded- moves from one point on the curve to the next point, change in demand- shifts the whole curve.

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Related Questions

The law of demand states that other things equal when the price of a good

a)rises, the quantity demanded of the good rises

b)rises, the demand falls

c)falls, the quantity demanded of the good rises

d)falls, the demand rises

indigoalpaca102

The law of demand implies that other things remaining the same,

A) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will increase.

B) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease.

C) as income increases, the quantity of cheeseburgers demanded will increase.

D) as the demand for cheeseburgers increases, the price of a cheeseburger will fall.

emeraldminnow227

1. If marginal utility is negative, total utility is

a. Positive

b. Negative

c. Decreasing

d. Constant

e. Increasing

2. If utility-maximizing consumers face identical prices, they will have identical

a. Marginal utilities for each good

b. Ratio of marginal utilities for each good

c. Preferences

d. Ratios of total utilities for each good

e. Total utilities for each good

3. The substitution effect

a. Always increases quantity demanded of a good whose relative price has fallen

b. Is opposite in sign to the income effect for all normal goods

c. Is opposite in sign to the income effect for all normal goods

d. May cause demand curves to be upward sloping

e. Is always dominated by the income effect for normal goods

4. Demand curves for normal goods slope downward because

a. The substitution effect of a price change is greater than the income effect

b. Substitution and income effects work in the same direction

c. The income effect is always greater than the substitution effect

d. The income effect is always less than the substitution effect

e. None of the above

5. The idea that a consumer derives less additional satisfaction from consuming successive units of a good is called

a. Diminishing consumer surplus

b. The paradox of value

c. Diminishing marginal utility

d. Diminishing total value of consumption

e. Diminishing total utility

indigolocust149