Textbook Notes (368,476)
United States (206,053)
Economics (307)
ECON 1901 (44)
Chapter 3


2 Pages
Unlock Document

ECON 1901
Nathan Blascak

Chapter 3:Supply and Demand I.The Demand Curve for Oil • demand curve- a function that shows quantity demanded at different prices -shows quantity demanders are willing and able to buy at different prices A. Consumer Surplus 1.Consumer surplus- a consumer’s gain from exchange a.) on a graph, total consumer surplus is the shaded area beneath the demand curve and above the price b.) can calculate consumer surplus using formula for right triangle (bh/2) B. What shifts the demand curve? 1.Increase in demand shifts the curve outward, up, and to the right 2. A decrease in the curve shifts the demand inward, down and to the left • Important Demand Shifters 1.Income a.) normal good- when increase in income increases the demand for a good b.) inferior good- a good in which an increase in income decreases the demand for a good 2.Population- more people, more demand 3.Price of substitute a.) a decrease in the price of a substitute will decrease the demand for the original product 4.Price of complements a.) complements- things that go well together i.) greater consumption of good A --> greater consumption of its compliment, good B ii.) a decrease in the price of a complement increases the demand for a complementary good iii.)an increase in the price of a complement decreases the demand for the complementary good 5.Expectations- an expectation for future reduction increases present day demand
More Less

Related notes for ECON 1901

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.