Textbook Notes (368,430)
ECON 208 (113)
Chapter 3

# Chapter 3.docx

3 Pages
52 Views

School
Department
Economics (Arts)
Course
ECON 208
Professor
Mayssun El- Attar Vilalta
Semester
Fall

Description
Chapter 3 – Demand, Supply, and Price Sept.18.12 Quantity demanded: - Total amount that consumers desire to purchase in some time period - Quantity bought/exchanged refers to actual purchases - Quantity demanded is a flow variable - Influenced by: - products’ own price - consumers’ income - prices of other products - tastes - population - expectations about the future Demand schedules and demand curves: - Ask consumers how much they would like to buy at each given price before the amount is produced - Not the actual amount of what will be exchanged in the market Price per ton Quantity demanded U \$20 110 V \$40 85 W \$60 65 X \$80 50 Y \$100 40 Distinction between stocks and flows: - Flow variable: it is so much per unit of time - Stock variable: has a meaning at a point in time - i.e. income = flow, consumer expenditure = flow, amount of money in a bank account = stock Quantity demanded and price: - Basic hypothesis - ceteris paribus: price of a product and the quantity demanded are negatively related - There are usually several products that can satisfy any given want or desire - Reducing the price of a product means that the specific desire can now be satisfied more cheaply by buying more of that product - Effect on demand due to an increase in household income: 1. Normal good: quantity demanded increases when income rises 2. Inferior good: quantity demanded falls when income rises - Distribution of income: changes for particular goods - Prices of other products: substitutes vs. complements - Change in demand = change in quantity demanded at every price – a shift of the entire curve - Change in quantity demanded = refers to a movement from one point on a demand curve to another point either on the same demand curve or on a new one Supply: - When price increases so does supply - Changes in price imply moves along the supply curve - Changes in variables other than the price shift the whole curve right or left - prices of inputs - technology - government taxes/subsidies - prices of other products (substitutes and complements) - number of suppliers entering and exiting the market Supply schedules: Price per ton Quant
More Less

Related notes for ECON 208
Me

OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Join to view

OR

By registering, I agree to the Terms and Privacy Policies
Just a few more details

So we can recommend you notes for your school.