ECON 2000 Chapter : Econ Study
Document Summary
Economic theory- argues that your choices, your plans, change the opportunities available to others and that social coordination is a process of continuing mutual adjustment to the changing net advantages. Economics is a theory of choice and its unintended consequences. Inferior good: if consumers demand less when their income rises, example ramen noodles, price elasticity of demand. If the amount of any good that people want to purchase changes substantially in response to a small change in price, demand, is said to be elastic. Chapter 4- the concept of supply: costs are tied to actions, not things, things have no costs at all. Inelastic= a large price change doesn"t really affect quantity supplied. Chapter 5: supply and demand: a process of coordination: read page 102-104, market, market clearing price is when qdemanded=qsupplied, transaction costs, the costs of arranging contracts or transaction agreements between suppliers and demanders.
