ECO101H1 Lecture Notes - Open Economy, Plasma Display, Substitute Good

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8 Apr 2012
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LA #2 Supply and Demand
Demand
- Determinants of quantity demanded; Time, Desire, Determinants
o Substitute goods
o Complimentary goods
o Income
o Change in taste and preferences
o Price
Determinants of Quantity Demanded
1) Price of X **- prime determinant of Q d
2) Income
3) Price of Substitute
4) Price of Compliment Goods
5) Taste/ Preferences
6) Price Expectation
7) Population
Qxd Qx; Px; Py; Pz
Price of Good x 
  
Price of Substitute Good Y 
  
Price of Compliment Good z 
  
Price increase, quantity demanded decrease
- Buy substitute goods
- Income effect
1) Taste/ Preferences
2a) Income - 
   - Normal good- income bigger, buy more
o B) 
  - Inferior Goods, income goes up, buy less- better goods to replace it
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o C) 
  - Income Independent
3) Price Expectation- rarely dealth with it
4) population
- Demand Curve for Good X
-
- Linear Relationship
- Negatively Slope
- D= Demand Schedule
Shifts in Demand
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- D2= Increase in Demand, Income increase, this good is normal, income decrease, inferior
good increase
- D3= Decrease in Demand ;Bad Media, A cheaper substitute good
Change in Quantity Demanded
- Change in Price Cause movement not as same as shift
-
Quantity Supplied Qs
1) Price of Good x ** mainly used : 
  
2) Price of Input (Raw Materials): 
  
3) Price of Good y: 
  
4) Technology: 
  
Relate to number 1=
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