ECON 103 Lecture Notes - Lecture 3: Demand Curve, Marginal Cost, European Cooperation In Science And Technology

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jadeporcupine414

19 Oct 2017

School

Simon Fraser University

Department

Economics

Course

ECON 103

Professor

Marie Rekkas

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Document Summary

Chap 3: demand and supply relative price: ratio of a good"s money price to the price of the next best alternative good ( the good"s opp. cost) Quantity demanded: amount that consumers plan to buy during a particular time period @ a particular price. When a relative price (opp cost) of a good rises, ppl seek substitutes so quantity demanded goes down. When price of a good rises relative to income, people cannot afford it, so quantity demanded goes down. Demand refers to entire relationship between price & quantity demanded. Demand curve shows relationship when all other in uences remain the same (slope downward) Willingness to pay measures marginal bene t (if i know theres a lot, i"m less willing to pay more) Change in demand: when some in uence other than price changes, there is a change in demand (new curve) 6 main factors that change demand of a good: prices of related goods produced, expected future prices.

Related Questions

The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more
or less expensive relative to other goods that are substitutes.
B) the shift of a demand curve when the price of a substitute good changes.
C) the movement along the demand curve due to a change in purchasing power brought
about by the price change.
D) the shift in the demand curve due to a change in purchasing power brought about by the
price change.

burgundyferret557

When the price of good A rises from $180 to $220, the quantity of good A demanded decreases from 250 to 150 units a day, and the quantity of good C demanded increases from 75 to 125 units a day.

From this information, we can determine that _______.

A. the cross elasticity of demand is positive, so the two goods are substitutes

B. the goods are complements because as the price of good A changes so does the quantity demanded of good C

C. good C is a normal good because as the price of good A rises, people switch to good C

D. the cross elasticity of demand is less than 1, so the two goods are substitutes

orchidbee10

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

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ECON 103 Lecture Notes - Lecture 3: Demand Curve, Marginal Cost, European Cooperation In Science And Technology

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