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## Econ week three notes

by: Olivia Notetaker

25

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# Econ week three notes Econ 150-21

Marketplace > La Salle University > Economcs > Econ 150-21 > Econ week three notes
Olivia Notetaker
La Salle
GPA 3.49

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These notes are going to be on the exam
COURSE
Intro Macroeconomics
PROF.
Dr. Mshomba
TYPE
Class Notes
PAGES
2
WORDS
KARMA
25 ?

## Popular in Economcs

This 2 page Class Notes was uploaded by Olivia Notetaker on Sunday February 7, 2016. The Class Notes belongs to Econ 150-21 at La Salle University taught by Dr. Mshomba in Fall 2016. Since its upload, it has received 25 views. For similar materials see Intro Macroeconomics in Economcs at La Salle University.

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Date Created: 02/07/16
Econ week three notes nd th February 2 and 4 - Milk= f(price of substitutes, nutritional value, number of consumers, consumer income, taste, price of milk, expectations…) o Related goods= substitute and complementary o If everything is held constant EXCEPT price of milk-  If price decreases, demand increases= law of demand. Inverse relationship between price and quantity demanded  Line= demand (price and quantity demanded together)  Specific point on line= quantity demanded  Shift in whole curve= change in demand (happens because of determinants of demand)  Shift in points= change in quantity demanded (happens because of price of product itself) - We have to know if product is normal or inferior good to know what would happen to a product - Change in income: income increases for normal goods, demand increases (shift right); for inferior goods, demand decreases (shift left) - Increase in number of buyers= increase in demand - Increase in taste= increase in demand - Change in price of related good (oj)increases = increase in demand for other product (milk) o Positive relationship with substitute goods - Change in price of cereal increases= demand for milk decreases o Inverse relationship with complementary goods - Change in quantity supplied is change in point, change in supply= shift in curve - Law of supply- price goes up, quantity supplied goes up o Positive relationship o Technology, prices of resources, expectations, taxes and subsidies, number of sellers, prices of related goods - The slope tells us how sensitive suppliers or demanders are to change - The production cost determines the location of the supply line o Improvement in technology= decrease in cost o If taxes decrease, decrease in cost. If subsidies increase, decrease in cost o Anything causing product cost to decrease causes supply curve to shift outward o Price of resources decrease= production cost decreases o Expectations: if you’re selling something and expect higher prices in future, you’ll sell less now. Supply with decrease. Consumers will want to buy now, so price will increase. o Prices of related goods: if price of trucks increase, supply of trucks will increase, supply of cars will decrease - Equilibrium price- amount of supply=amount of demand - Equilibrium is a moving target - If you have the equation for Qd and Qs, set them equal to each other to find price o If want individual, find price and substitute - If Qd is less than Qs, you have a surplus o Any point higher than equilibrium price is a surplus. Creates pressure for price to fall - If Qd is more than Qs, you have a shortage - Price ceiling= max price you can sell a product o Set by government o Usually set below equilibrium price

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