CAS EC 101 Lecture 4: EC101_Watson_Lecture4

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3 Oct 2018

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CAS EC 101 Lecture Notes - Lecture 3: Demand Curve

CAS EC 101 Lecture 4: EC101_Watson_Lecture4

CAS EC 101 Lecture Notes - Lecture 5: Price Ceiling, Rent Regulation, Price Floor

Document Summary

Quantity demanded: a single point on a demand curve. What are the factors that can cause an increase in demand? (shift right) Price of related goods: price of substitute went up, price of complement went down. What are the factors that can cause a decrease in demand? (shift left) Price of related goods: price of substitute went down, price of complement went up. Input prices: price of all the stuff it takes to make something. Price: how much does it sell for. A table that shows the relationship between the price of a good and the quantity supplied. Supply curve: plot the price and quantity supplied on a graph. **the quantity supplied in the market is the sum of the quantities supplied by all sellers at each price. **increase in quantity supplied is a change in price along the curve. **the entire curve changes (shifts left or right) when one of the supply determinants (that aren t price) changes.

Related Questions

Which of the following would cause the demand curve to shift to the right?

a. The price of a substitute decreases.

b. The price of a complement increases.

c. Income decreases for an inferior good.

d. Tastes and preferences decrease.

e. Income decreases for a normal good.

silverotter279

Which of the following would not cause the demand curve to shift to the right?

a. a decrease in the price of a product.

b. a decrease in the price of the complement.

c. an increase in the price of a substitute.

d. a change in tastes and preferences.

blackcockroach688

Learning Objective: In terms of macroeconomics; Be comfortable with what shifts the supply and demand curve, and how shifts in either supply or demand or both supply and demand change equilibrium quantity and equilibrium price.

You must answer both. Strategy: explain whether each factor changes supply or demand and in what direction.

1. Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

2. What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

olivezebra73

CAS EC 101 Lecture 4: EC101_Watson_Lecture4

CAS EC 101 Lecture Notes - Lecture 3: Demand Curve

CAS EC 101 Lecture 4: EC101_Watson_Lecture4

CAS EC 101 Lecture Notes - Lecture 5: Price Ceiling, Rent Regulation, Price Floor

Document Summary

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