ECON 1050 Chapter Notes - Chapter 3: Inferior Good, Opportunity Cost, Marginal Utility

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Any arrangement that enables buyers and sellers to get information and to do business with each other. There are markets for goods, services, resources (computer programmers), and other manufactured inputs (computer chips) Can be a physical place, groups of people spread around the world through e-commerce, or like most markets, unorganized collections of buyers and sellers. Some markets are simple, others are more complex. Competitive market is a market that has many buyers and many sellers so no single buyer or seller can influence the price. Producers offer items at a high enough price to cover their opportunity costs, consumers respond to this by seeking lower priced alternatives. Money price of a good is the amount of money needed to buy it. Relative price of a good the ratio of its money price to the money price of the next best alternative good is its opportunity cost. To express relative price we use a basket" of all goods and services.

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