Textbook Notes (367,747)
Canada (161,363)
Economics (923)
ECN 104 (388)
Chapter 3

Chapter 3

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Department
Economics
Course
ECN 104
Professor
Halis Yildiz
Semester
Summer

Description
Chapter 3: Demand, Supply and Market Equilibrium 3.1 Demand Demand: a schedulecurve that shows the various amounts of product consumers are willing & able to purchase at each of a series of possible prices, during some specified period of time Law of demand: all else equal, as price falls, quantity demanded rises; prices rises, quantity demanded falls Downward slope of demand curve reflects law of demand Diminishing marginal utility: as consumer increases the consumption of a goodservice, the marginal utility obtained from each additional unit of the goodservice decreases (Ex. 2 Big Mac will yield less satisfaction to consumer than the 1 , and 3 still less than 2 ) Income effect: change in price of product changes a consumers real income (purchasing power) and thus quantity of the product purchased Substitution effect: change In price of a product changes the relative expensiveness of that good and hence changes willingness to buy it rather than other goods Demand curve: illustrating the inverse (negative) relationship between the quantity demanded of a goodservice and its prince, other things equal (MB curve) Horizontal axis: quantity demanded; Vertical axis: price Market demand: adding quantities demand by all consumers at each possible price www.notesolution.com
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