ECON 110 Micro Chapter 4 Notes
ECON 110 Micro Chapter 4 Notes ECON 110
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This 3 page Class Notes was uploaded by Lauren Heller on Monday January 18, 2016. The Class Notes belongs to ECON 110 at University of Alabama - Tuscaloosa taught by Dr. Harold elder in Summer 2015. Since its upload, it has received 25 views. For similar materials see Principles of Economics in Economcs at University of Alabama - Tuscaloosa.
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Date Created: 01/18/16
Micro- Econ Chapter 4 Notes Shifts in Demand Curve Income When income of a normal good decreases demand decreases Income increases, demand increases When income of an inferior decreases demand increases Income decreases, demand decreases Price of related good When two items are substitute and the price of one item increases the demand for the other item increases (Price of) Substitute increases, demand increases When two items are compliments and the price of one item increases the demand for the other item decreases (Price of) Compliment increases, demand decreases Tastes When consumers tastes for a good increase the demand increases Tastes increases, demand increases Expectations When the future price of a good is said to decrease, consumer expectations increases causing demand to decrease Expectations increase, demand decreases Number of Buyers When number of buyers increase the demand increases Buyers increase, demand increases CHANGE IN PRICE OF THE GOOD IS A MOVEMENT ALONG THE DEMAND CURVE ONLY Demand increase is a shift to the right, demand decrease is a shift to the left Shifts in Supply Curve Input Prices When the price of any factor of production used to produce the item increases the supply decreases Input prices increase, supply decreases Technology Technology advances make production faster, causing supply to increase Technology increases, supply increases Expectations When the future price of a good is said to decrease, consumer expectations increases causing supply to decrease Expectations increase, supply decreases Number of Sellers Number of sellers in a market increases, causing supply to increase Number of sellers increases, supply increases CHANGE IN PRICE OF GOOD IS A MOVEMENT ALONG THE SUPPLY CURVE ONLY Supply increase is a shift to the right, supply decrease is a shift to the left Market- a group of buyers and sellers of a particular good or service Competitive market- a market in which there are many buyers and sellers, so that each has no impact on market price Monopoly- only one seller that sets the price Quantity demanded- the amount of a good that buyers are willing and able to purchase Law of demand- the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises Demand schedule- a table that shows the relationship between price of a good and quantity demanded Demand curve- a graph of the relationship between the price of a good and quantity demanded Market demand- sum of all individual demands for a particular good or service Quantity supplied- the amount of a good that sellers are willing and able to sell Law of supply- a claim that the quantity supplied of a good rises when price of good rises Supply schedule- a table that shows the relationship between the price of a good and quantity supplied Supply curve- a graph that of the relationship between the price of a good and the quantity supplied Market supply- sum of all individual supplies for a particular good or service
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