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TEST 1 ECON

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Department
Economics
Course
ECON 2010
Professor
All Professors
Semester
Fall

Description
TEST 1Ben Bernanke Head of the central bank of the US the most powerful economic policy maker in the worldRead recession concerns ASAPEconomicsthe study of how individuals make choices in the face of scarcityCharles DefinitionStudy of how societies provision themselves with the material means of existence oWhat goods and services are we going to produceoHow will we produce and organize societyoFor whom are we producing foroConsequencesMicroeconomicsbehavior of individual buyers consumers producersMacroeconomicsnot concerned with the individual interested in the big picture society as a wholeconsequences for society Economic growthUnemploymentInflationWednesday January 16 2008Practice problems Chapter 3 ALLTake a look at JOBLESS CLAIMS p 40 in Secrets bookSupply and demand DO NOT existsPeople businessesgovernments exist These things make decisions about many things every day especially decisions about buying and selling goods and services in a market in exchange for MONEYWithout money you cannot have a market system of economic organizationThe interaction of buyers and sellers with each other determines the quantity of goods and services that get exchanged along with the price of goods and servicesThis is just a concept we use for describing this type of behaviorSo when we talk about demand think about our own behavior when it comes to buying stuff oPut yourself in the position of the decision maker in a particular situationBuyers side of market DEMANDDemandthe ability AND willingness of people to purchase a good or a service at various pricesoWithout willingness AND ability you dont have demand you must have bothDoes the price of a good or service itself determine the demand of itoNOit is various prices The price is irrelevant to the demand for it oRegardless of the price its the ability and willingnessNot to be confused with quantity demandthe specific amount of a good or service that people are willing and able to purchase at a specific priceoCombination of a specific price and a specific amount oSo the price doesnt determine the demand but it does determine the quantity demandedDeterminant of quantity demanded is the price of the good or service itselfoPrice of a goodan inverse relationship between the price of a good and the amount that people are willing to buy
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