Economics 1021A/B Chapter 3: Econ Chapter 3 Notes.docx

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Emilie Rivers

Document Summary

Market and prices: a market has two sides: a buyer and a seller, there are markets for both goods and services, competitive market: a market that has many buyers and many sellers, so that no one buyer can influence the price, money price: the exchange of dollars for a good/service, relative price: the ratio of one price to another (ex. If you demand something, you must: want it, can afford it, plan to buy it, wants are the unlimited desires for goods and services, quantity demand: the amount that consumer plan to buy during a given time period at a specific price of a good/service, sometimes the demand exceeds the supply so consumer have to purchase less, the law of demand, substitution effect. Factors include: the prices of factors of production, the prices of related goods produced, expected future prices, the number of suppliers, technology, the state of nature.