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Final

ECON 2010- Final S.G. (aced the test and got 96%)

43 Pages
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Department
Economics
Course Code
ECON 2010
Professor
All

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Description
Econ201012112013Chapter3VocabPerfectlycompetitivemarketamarketthatmeetstheconditionsof1manybuyersandsellers2allfirmssellingidenticalproductsand3nobarrierstonewfirmsenteringthemarketTheDemandSideoftheMarketDemandScheduleAtableshowingtherelationshipbetweenthepriceofaproductandthequantityoftheproductdemandedQuantityDemandedtheamountofagoodorservicethataconsumeriswillingandabletopurchaseatagivenpriceDemandCurveacurvethatshowstherelationshipbetweenthepriceofaproductandthequantityoftheproductdemandedonagraphMarketDemandthedemandbyalltheconsumersofagivengoodorserviceTheLawofDemandLawofdemandtherulethatholdingeverythingelseconstantwhenthepriceofaproductfallsthequantitydemandedoftheproductwillincreaseandwhenthepriceofproductrisesthequantitydemandedoftheproductwilldecreaseWhatExplainstheLawofDemandBoththesubstitutioneffectandincomeeffecthappensimultaneouslySubstitutioneffectthechangeinthequantitydemandedofagoodthatresultsfromachangeinpricemakingthegoodmoreorlessexpensiverelativetoothergoodsthataresubstitutesExamplewhenthepriceofenergydrinksfallsconsumerswillsubstitutebuyingenergydrinksinsteadofbuyingothergoodssuchassportsdrinksorcoffeeIncomeeffectthechangeinthequantitydemandedofagoodthatresultsfromtheeffectofachangeinthegoodspriceonconsumerspurchasingpower1PurchasingpoweristhequantityofgoodsaconsumercanbuywithafixedamountofincomeHoldingEverythingElseConstantTheCeterisParibusConditionCeterisparibusallelseequalconditiontherequirementthatwhenanalyzingtherelationshipbetweentwovariablesuchaspriceandquantitydemandedothervariablesmustbeheldconstantAshiftofdemandcurveisanincreaseoradecreaseindemandAmovementalongademandcurveisanincreaseordecreaseinthequantitydemandedVariablesthatShiftMarketDemandIncomeifincomeincreasesthedemandcurvemovestotherightdecreasesmovestotheleftNormalgoodagoodforwhichthedemandincreasesasincomerisesanddecreasesasincomefallsexShrimpandprimeribInferiorgoodagoodforwhichthedemandincreasesasincomefallsanddecreasesasincomerisesexHotdogsandtunaPricesofrelatedgoodsSubstitutesGoodsandservicesthatcanbeusedforthesamepurposeExCoffeeandEnergyDrinksIfCoffeepricegoesdownthedemandcurveforenergydrinksshiftstotheleftIfthepriceofcoffeegoesupthedemandcurveforenergydrinksincreasesandshiftstotherightComplementsgoodsandservicesthatareusedtogetherExHotdogbunsandhotdogsIfthepriceforhotdogbunsgodownthedemandcurveforhotdogswithshifttotherightIfthepriceforhotdogbunsgoupthedemandcurveforhotdogswillshifttotheleftTastesIfconsumerstasteforaproductincreasesthedemandcurvewillshifttotherightandwhenconsumerstasteforaproductdecreasesthedemandcurvewillshifttotheleftPopulationanddemographicsDemographicsthecharacteristicsofapopulationwithrespecttoageraceandgenderExMoreHispanicsmeansanincreaseindemandforSpanishgoodscausingdemandcurvetoshifttotherightExpectedfutureprices2ExIfconsumersbelievethathousepriceswillfallinthenearfuturethedemandcurveforthecurrenteconomicstatewillshifttotheleftAChangeinDemandversusaChangeinQuantityDemandedAchangeindemandreferstoashiftofthedemandcurvewhichhappenswhenvariablesotherthanpriceaffectthecustomersAchangeinquantitydemandedreferstoamovementalongthedemandcurveasaTable31pg72resultinachangeintheproductspriceTheSupplySideoftheMarketQuantitysuppliedtheamountofagoodorservicethatafirmiswillingandabletosupplyatagiventimeSupplySchedulesandSupplyCurvesSupplyscheduleatablethatshowstherelationshipbetweenthepriceofaproductandthequantityoftheproductsuppliedSupplycurveacurvethatshowstherelationshipbetweenthepriceofaproductandthequantityoftheproductsuppliedTheLawofSupplyLawofsupplytherulethatholdingeverythingelseconstantincreasesinpricecauseincreasesinthequantitysuppliedanddecreasesinpricecausedecreasesinthequantitysuppliedVariablesthatShiftMarketSupplyPricesofinputsThechangeinthepriceofaninputwhichisanythingthatisusedintheproductionofagoodorserviceExPriceofaningredientinanenergydrinkrisesthecostofproductionrisesandsupplycurvewillshifttotheleftTechnologicalChangeTechnologicalchangeapositiveornegativechangeintheabilityofafirmtoproduceagivenlevelofoutputwithagivenquantityofinputs3
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