New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Microeconomics Ch. 3 textbook notes

by: Kelsey Voelker

Microeconomics Ch. 3 textbook notes Econ 201

Marketplace > Towson University > Economics > Econ 201 > Microeconomics Ch 3 textbook notes
Kelsey Voelker

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

these are textbook notes from chapter 3
Professor Baejter
Class Notes
25 ?




Popular in Microeconomics

Popular in Economics

This 3 page Class Notes was uploaded by Kelsey Voelker on Friday September 16, 2016. The Class Notes belongs to Econ 201 at Towson University taught by Professor Baejter in Fall 2016. Since its upload, it has received 7 views. For similar materials see Microeconomics in Economics at Towson University.


Reviews for Microeconomics Ch. 3 textbook notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/16/16
Microeconomics 9/12/16 Chapter 3 notes Textbook Chapter 3: Demand, Supply, and the Market Process Consumer choice and the law of demand  The law of Demand: there Is and inverse (or negative) relationship between the price of a good or service and the quantity of it that consumers are willing to purchase.  Substitutes: goods that perform similar functions The market Demand Schedule  Demand Schedule: a table listing the various quantities of something consumers are willing to purchase at different prices Consumer Surplus  The difference between the maximum amount consumers would be willing to pay, and the amount they actually pay for a good  On graph: the area below the demand curve, but above the actual price paid Changes in Demand versus Changes in Quantity Demanded  The purpose of the demand curve is to show what effect a price change will have on the quantity demanded (or purchased) of a good.  Change in quantity demanded a change in the quantity of a good purchased in response solely to a price change ( a movement along a demand curve from one point to another)  Change in demand a shift in the demand curve  Factors that cause a change in demand o 1. Changes in consumer income o 2. Changes in the number of consumers in the market o 3. Changes in the price of a related good o 4. Changes in expectations o 5. Demographic changes o 6. Changes in consumer tastes and preferences Producer choice and the Law of Supply  Producers convert resources into goods and services by doing the following: o Organizing productive inputs and resources, like land, labor, capital, natural resources, and intermediate goods; o Transforming and combining these inputs into goods and services o Selling the final products to consumers  The sum of the producer’s cost of each resource used to produce a good will equal the opportunity cost of production The Role of Profits and Losses  Firms earn a profit when the revenues from the goods and services that they supply exceed the opportunity cost of the resources used to make them.  Losses occur when the revenue derived from sales is insufficient to cover the opportunity cost of the resources used to produce a good or service Market Supply Schedule  Law of Supply: there is a direct (or positive) relationship between the price of a good or service and the amount of it that suppliers are willing to produce. This means that the price and the quantity producers wish to supply move in the same direction. As the price increases, producers will supply more-and as the price decreases they will supply less. Producer Surplus  Producer Surplus: the difference between the amount a supplier actually receives (based on the market price) and the minimum price required to induce the supplier to produce the give units (their marginal cost). Changes in supply versus changes in quantity supplied  Factors: o Changes in resource prices o Changes in technology o Elements of nature and political disruptions o Changes in taxes How market prices are determined: demand and supply interact  Market: not a physical location but an abstract concept that encompasses the forces generated by the decisions of buyers and sellers  Equilibrium: a state in which the conflicting forces of demand and supply are in balance. o when a market is in equilibrium, the decisions of consumers and producers are brought into harmony with on another, and the quantity demanded will equal the quantity supplied. Efficiency and Market Equilibrium  economic efficiency: when a market reaches equilibrium, all the gains from trade have been fully realized Invisible Hand Principle  Market prices coordinate the actions of self-interested individuals and direct them toward activities that promote the general welfare Competition and Property Rights  The efficiency of market organization is, in fact, dependent upon these two things: o 1. Competitive markets o well-defined and enforced private-property rights o


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Janice Dongeun University of Washington

"I used the money I made selling my notes & study guides to pay for spring break in Olympia, Washington...which was Sweet!"

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.