ECON 2010 Lecture Notes - Lecture 2: Marginal Utility, Demand Curve, Economic Equilibrium
20 Nov 2017
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3 elements: buyers/consumers, sellers/firms, market place (where they come together) 1. taste broad view of what a consumer thinks of a product. Latin expression you can"t argue with taste economic principle we accept people"s tastes for what they are as a given. When taste changes, economists think then demand must be changing : income affects the demand of something. A normal good its demand goes up when income goes up (more expensive stuff) Inferior good demand goes down when income goes up (spam, white bread, cheap stuff: price the of related goods (like the price of bacon and cereal) Expectations of future prices: taxes and subsidies. More subsidies more demand: number of consumers. Market demand is equal to horizontal sum of all individual demand curves. As number of consumers increases, demand will also increase, vise versa. Change in demand vs change in quantity demanded: Change in demand whole new shift in the demand curve.
