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ECON 1010
Steven Edwards

Lecture 3 Tutorial tuesday 10-11 thursday 10 - 11/ 3-4 GEN • Substitute commodity for everything • Income effect more you earn higher wants and seperate from inferior and normal goods. Demand • Depending on price you will buy certain amount off goods • grapth price and quantity demanded • higher the price the less youll likley by vice versa. • qd = f(P, • P is the movement variable. • Primaryy 6 that change desicion - price of related goods, EXpected future prices, income, expected future income and credit, population and prefrences. • ^ shift in curve Supply • Measure hypothetical quantites • Three Things. • 1. Has the resources and tech to produce it • 2. Can profit from producing it • 3. has a definite plan • 5 factors that change supply: price of factors of production, price of related foods, future prices,number of suppliers, tech, state of nature • shift due to these factors^ GDP • Gross Domestic Product. market value of allfinal goods and services produced ina county in given time period • 4 Factors : Market value, Final goods and services, , produced within a country, in a given period of time . • measures total income and expenditure • helps qualify link betwween productivity and living standards. our living standards with increase in income. in order to earn more and purchase need to produce more. • Calculation of GDP = C+I+G+(X-M) • CONSUMPTION • durable goods -long lasting • semi durable -short amount of time • non durable - food, gasolin Four parts of GDP Market Value • Prices which Items are tradede in markets Final goods and services • final good that is bough by its final user during specific time • contrasts with intermediate good which is produced by one firm bought by another frim and used as component of final good or service Produced within a country • only goods produced within canda for example IN a given time Period GDP and the Circular Flow of Expenditure an Income Households and firms • but services of labour capital land in facotr markets • retained earnings being income that households save and lend back to firms • when a frim adds unsold ouput to inventory we can think of the firm as buyinf goods from itself Governments • nuy goods and services from firms and their expenditure on goods and services called government expenditure • finance their expenditure with taxes • pay subsides to frims Rest of the World • exports and imports - net export- export minus imports GDp equals Expenditure Equals Income • Gross Domestic producct can be measured in two ways by the total expenditure on goods and services or by the total income earned producing goods and services. • To Calculate - Y=C+I+G+X-M Why is Domestic Product Gross • grooss means subrtacting the depreciation of capital • depreciation decrease in value of capital • buying
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