Micro Economics, Week 4 notes
Micro Economics, Week 4 notes ECON 202-004
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This 2 page Class Notes was uploaded by Loretta Hellmann on Saturday September 17, 2016. The Class Notes belongs to ECON 202-004 at Western Kentucky University taught by Dr. Melvin Borland in Fall 2016. Since its upload, it has received 12 views. For similar materials see Prin Economics-Micro in Microeconomics at Western Kentucky University.
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Date Created: 09/17/16
Week 4 Notes Monday, September 12, 20161:57 PM Quantity demand- a particular number of goods the consumer would purchase is the good was a particular price Things to influence customers 1. Price (+) 2. Costs of production (-) 3. Tastes 4. Technology 5. Expectation of Future Price 6. Number of producers If there is a change in reward then there will always be a change in behavior How sells behave when there is change in future price • CONSUMER: Suppose cokes sell $3 for a 12 pack. And that’s how it's always been and what you've always bought them at, but one day you hear that a 12 pack is going to get raised to $5 so you buy more NOW to beat the future price because there's a bigger reward. If they raise the price to $3.30 then the consumer won't buy as more because the reward isn't as great as the previous scenario • PRODUCER: Suppose a producer thinks the future price is going to fall. They have now changed their mind, they still expect the price to fall, but not as much as previously thought. They will offer less then what they would've previously Producers want to sell more when price is higher, so if price is going to fall, they will sell more now, but if price is going rise, then they’ll hold off and sell less now The equilibrium price is when the demand price and quantity are the same as the supply price and demand • Natural forces will cause prices to go to the equilibrium • Equilibrium comes in a free market with no government interference Quantity produced Quantity purchased 1. Price (+) 1. Price (-) 2. Costs of Production (-) 2. Income 3. Tastes - If it’s a normal good (+) 4. Technology - If it's an inferior good (-) 5. Expectation of Future Price (-) 3. Price of another good 6. Number of Producers - If it's a substitute good (+) - If it is a complimentary good (-) 4. Tastes 5. Expectation of future price (+) 6. Number of consumers (+) 4. Tastes 5. Expectation of future price (+) 6. Number of consumers (+)