ECON 1101 Lecture 3: MacroEcon Notes - Chapter 3
10 Mar 2017
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Market the market of any good consists of all buyers and sellers of that good. Demand curve a schedule or graph showing the quantity of a good that buyers wish to buy at each price. Substitution effect change in the quantity demanded of a good that results because buyers switch to or from substitutes when the price of the good changes. Income effect change in quantity demanded of a good that results because a change in the price of a good (cid:272)hanges the (cid:271)uyer"s pur(cid:272)hasing po(cid:449)er. Buyer"s reservation price largest dollar amount the buyer would be willing to pay for a good. Supply curve graph or schedule showing the quantity of a good that sellers wish to sell at each price. Seller"s reservation price smallest dollar amount for which a seller would be willing to sell an additional unit, generally equal to marginal cost.
