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Economics (969)
ECON 101 (318)
Lecture

# Chapter 3 Lecture Notes Diagrams.docx

8 Pages
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School
University of Waterloo
Department
Economics
Course
ECON 101
Professor
Corey Van De Waal
Semester
Winter

Description
Part A: DEMAND CURVE SHIFTERS: a. As number of buyers increases, demand curve shifts to the RIGHT b. As income of the consumers increases, demand curve for normal goods (goods that you will consumer more of if your income increases) shifts to the RIGHT c. As income of the consumers increases, demand curve for inferior goods (goods that you will consume less of if your income increases (ex. Mac and cheese) shifts to the LEFT d. As people’s taste change in favour of the good, demand curve shifts to the RIGHT e. As the price of a substitute good increases, demand curve shifts to the RIGHT f. As the price of a complementary good increases, demand curve shifts to the LEFT g. Expectation can also shift the demand curve LEFT D D’ D’ D’ Movement along the curve FTR,FALL2011 Page 1 PART B: SUPPLY CURVE SHIFTERS: a. As the number of sellers increases, supply curve shifts to the RIGHT b. As input price decreases, supply curve shifts to the RIGHT c. As technology improves, supply curve shifts to the RIGHT d. As the price of a substitute good in production increases, the supply curve of the good itself shifts to the LEFT e. As the price of a complement good in production increases, supply curve shifts to the RIGHT f. As sellers expect the future price of the good to be higher supply curve for the current period shifts to the RIGHT FTR,FALL2011 Page 2 PART C: Market Equilibrium: FTR,FALL2011 Page 3 PART D: Solving for EQM price and quantity mathematically: Demand Equation: quantity demanded = Supply Equation: PART E: Finding EQM price and quantity from a numerical table: Price Quantity Quantity of lattes of lattes demanded of lattes supplied \$0.00 16 0 1.00
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