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## ECON 111 Macroeconomics Chapter 4 Notes

by: Lauren Heller

76

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# ECON 111 Macroeconomics Chapter 4 Notes Econ 111

Marketplace > University of Alabama - Tuscaloosa > Econ 111 > ECON 111 Macroeconomics Chapter 4 Notes
Lauren Heller
UA
GPA 4.0

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These notes were taken in class during the class lecture.
COURSE
Macroeconomics
PROF.
Kent 0. Zirlott
TYPE
Class Notes
PAGES
2
WORDS
CONCEPTS
econ111, Macro, Macroeconomics, Econ, Economics
KARMA
25 ?

## Popular in Department

This 2 page Class Notes was uploaded by Lauren Heller on Wednesday January 27, 2016. The Class Notes belongs to Econ 111 at University of Alabama - Tuscaloosa taught by Kent 0. Zirlott in Fall 2016. Since its upload, it has received 76 views.

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Date Created: 01/27/16
Macro Chapter 4  Market- a group of buyers and sellers of a particular market  Competitive market- a market with many buyers and sellers, each has a negligible effect on price  Demand  Quantity demanded- the amount of the good that buyers are willing and able to purchase at a specific price  point of the demand curve  Demand curve- a set of various quantities demanded a corresponding price  it is the curve itself  downward sloping  The Law of Demand- the claim that the quantity demanded of a good falls when the price of the good rises, other things being equal  Demand schedule- a table that shows the relationship between the price of a good and the quantity demanded  Market demand- the sum of all the quantities demanded by all buyers at each price  Demand Curve Shifts  The demand curve shows how price affects quantity demanded, other things being equal.  A change in the price of the good changes quantity demanded and results in a movement along the demand curve  Non- Price determinants of demand shift the demand curve  Increase in demand shifts curve to the right  Decrease in demand shifts curve to the left  Demand curve shifters:  Number of buyers  increase in number of buyers causes an increases the quantity demanded  Income:  Normal good-  increase in income causes increase in quantity demanded  Inferior good-  an increase in income cause a decrease in quantity demanded  Price of related goods:  Substitutes-  an increase in the price of one causes an increase in demand for the other  Compliment-  an increase in the price of one causes a fall in demand for the other  Tastes-  as consumer tastes for a good increases causes an increase in quantity demanded  Expectations-  expectations affect consumers’ buying decisions  Expectations about future price, future income, etc.  Supply  Quantity supplied- the amount that sellers are willing and able to sell at a specific price  a point of the supply curve  Supply curve- a set of various quantities supplied at corresponding prices  It’s the curve itself  Slopes upward  Law of supply- the claim that the quantity supplied of a good rises when the price of the good rises, other things being equal  Supply schedule- a table that shows the relationship between the price of a good and the quantity supplied  Market Supply- the quantity supplied in the market is the sum of the quantities supplied by all sellers at each price  Supply Curve Shifters  The supply curve shows how price affects quantity supplied, other things being equal  A change in price of the good changes quantity supplied and results in a movement along the supply curve  Non- Price determinants shifts the supply curve  Increase in supply shifts the curve right  Decrease in supply shifts the curve left  Supply Curve Shifters  Input Prices (wages, price of raw materials, etc.)  A decrease in input prices causes an increase in supply  Technology  If an increase in production technology ALWAYS increases supply  Number of Sellers  An increase in the number of sellers causes an increase in the quantity supplied  Expectations  Expectations about future price, future income, etc.  Equilibrium- the market price where quantity supplied equals quantity demanded

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