Textbook Notes (363,452)
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ECO101H1 (177)
Chapter 3

ECO100Y1 Chapter 3 Notes

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University of Toronto St. George
Robert Gazzale

ECO100Y1 Textbook Notes Chapter 3 31 DemandQuantity Demanded the amount of a good or service that consumers want to purchase during some periodIt is a desired quantity and refers to a flow of purchases and thus must be expressed as X per period of timeFactors that affect the quantity demanded o Products own price o Consumers income o Prices of other products o Tastes o Population o Expectations about the futureCeteris paribus other things being equalconstantA basic economic hypothesis is that the price of a product and the quantity demanded are related negatively other things being equal Alfred Marshall referred to this as the law of demandDemand Schedule a table showing the relationship between quantity demanded and the price of a commodity other things being equalDemand Curve the graphical representation of the relationship between quantity demanded and the price of a commodity other things being equalThe demand curve will always have a negative slope implying that as price goes down quantity demanded goes upDemand the entire relationship between the quantity of a commodity that buyers want to purchase and the price of that commodity other things being equalA change in any of the variables previously held constant will shift the demand curve to a new positionIf a demand curve is shifted o Rightmore demanded at each price point o Leftless demanded at each price pointFactors that affect a demand curve o Consumers incomeHigher incomemore demanded and viceversaGoods for which the quantity demanded increases when income rises are called normal goodsGoods for which the quantity demanded falls when income rises are called inferior goods o Prices of other goodsSubstitutes in consumption goods that can be used in place of another good to satisfy similar needs or desires increase in product Y substitute pricedemand curve shifted right of product X
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