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ECO101H1 Lecture Notes - Demand Curve, Economic Equilibrium, Soybean

31 views9 pages
brownraven248
18 Oct 2013
School
UTSG
Department
Economics
Course
ECO101H1
Professor
James Pesando

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ECO101H1 Full Course Notes
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ECO101H1 Full Course Notes
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Document Summary

Marginal cost (mc) = additional cost if action is taken. Mc if output of shirts increases by one. to sewer mc = (oc of spent is ) (oc of your time) mc = (oc of spent plus oc of your time) Many buyers and sellers, each of whom has no influence on market price. Other things equal, the higher is the price of a good, the lower is the quantity demanded. Market demand curve: sum of individual demand curves. No change in: price of related goods, income, preferences. If price of a substitute increases, demand for good increases. If price of a complement increases, demand for good decreases. Shift in demand curve for ice cream cones: usually hot summer, sharp drop in price of yogurt cones (substitute) Other things equal, the higher is the price of a good, the higher is the quantity supplied.

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Related Questions

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

a.

all nonprice determinants of demand are held constant.
b.

only price is held constant.
c.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

a.

there is a movement along a given demand curve.
b.

the demand curve shifts in the opposite direction.
c.

the supply curve shifts in the opposite direction.
d.

the demand curve shifts in the same direction.

In the table below, individual demand schedules for Tex, Dex, and Rex are shown in addition to total market demand.

Fill in the missing values in this table.

Price

Tex
Qd

Dex
Qd

Rex
Qd

Total Quantity
Demanded

$8

3

3

2

  

7

5

4

  

15

6

  

5

10

22

5

9

  

14

29

4

11

7

18

  


a. Which buyer (Tex, Dex, or Rex) demands the most at a price of $7?

b. Which buyer's quantity demanded increases the least when the price is lowered from $7 to $6? 

c. Which direction would the market demand curve shift if Tex withdrew from the market? 

d. What if Dex doubled his purchases at each possible price?

e. Suppose that at a price of $6, the total quantity demanded increases from 22 to 32 units. Is this a 'change in the quantity demanded' or a 'change in demand'? 

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 consumers’ 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.