ECON101 Chapter Notes - Chapter 3: Cowhide, Economic Equilibrium, Energy Gel

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Emanuel Carvalho

Document Summary

Market has two sides: buyers and sellers. Markets for goods (apples), services (haircuts), resources (computer programmers), manufactured inputs (memory chips, auto parts), money (japanese yen), financial securities (yahoo!) Some can be through the internet, or by telephone and fax (e. g. e-commerce) We do most of our trading in unorganized collections of buyers and sellers (basketball shoes market) Competitive market: a market that has many buyers and many sellers, so no single buyer or seller can influence the price. Producers offer items for sale only if the price is high enough to cover their opportunity cost. Money price: the price of an object is the number of dollars that must be given up in exchange for it. The opportunity cost of an action is the highest-valued alternative forgone. Relative price: the ratio of one price to another an opportunity cost. Pick coffee, gum = each, ratio 1:2, opportunity cost = 2 packs of gum.