ECON-UB 1 Study Guide - Indifference Curve, Engel Curve, Demand Curve

• School: New York University
• Department: Stern Economics
• Course: ECON-UB 1
• Professor: All

Document Summary

This is the price that a transaction went for: real price: relative to an aggregate measure of prices or constant dollar price. This price must be calculated from nominal price. Cpi: measures aggregate prices, i. e. a metric of inflation. Nominal pric ecurrent year: e. g. base year is today, price of current year is price we want to convert. Downward pressure on price until equilibrium is reached. Quantity demanded increases and quantity supplied decreases. Minimum wage is one way of government intervention that causes surplus, as well as taxes and subsidies: shortage: excess demand. Upward pressure on prices until equilibrium is reached. Quantity demanded decreases and quantity supplied increases. Consumer theory: demand graphs quantity vs. price but axes are transposed (price is on y axis, quantity on x axis, negative slope, convex, change in quantity demanded: movement along curve caused by a change in price.