EC 2900 Notes: Week 1-4
EC 2900 Notes: Week 1-4 EC 2900 - 08
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This 3 page Class Notes was uploaded by Kaylee Notetaker on Sunday September 25, 2016. The Class Notes belongs to EC 2900 - 08 at Wright State University taught by D.R. Fannin in Fall 2016. Since its upload, it has received 14 views. For similar materials see Global Economic, Business and Social Issue in Economics at Wright State University.
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Date Created: 09/25/16
EC 2900 8/30 - 9/22 Economics is logic; the interaction between 2 or more people. wants & needs purposeful behavior self interested behavior scientiﬁc method willing & able supply and demand marginalized: consume 1 additional ceterisparbius: all things being equal budget line: all the resources you have production possibilities curve inside the curve: NOT using all resources outside the curve: using all resources market place: where 2 or more people come together to buy things. supple schedule: demand schedule: Price $ Quantity Price $ Quantity (supply) positive (demand) inverse 1 1 relationship: 1 5 relationship: as P increases, as P increases, 2 2 Q increases. 2 4 Q decreases. 3 3 3 3 4 4 4 2 5 5 5 1 determinates of demand: • taste and preferences • # of buyers in the market • income • price of related goods • complementary goods: example: if hotdogs price went down, buns price may go up • expectations determinates of supply: • price of resources: land, capital labor. • technology • taxes and subsides • price of related goods • expectations • # of sellers in the market ____________________________________________________________________________ Elasticity: our response to changes in price determinates of elasticity: • substitutes • necessity vs. luxury • proportion of price to income • time involved inelastic elastic 0 1 inﬁnity (perfect elasticity) where we our behavior determine is changing elasticity (unitary elasticity) market models (4): - pure competition characteristics • homogenous goods (no difference in the ﬁrm’s goods) • easy entrance and exit producers are price takers not price makers • long run: ability of products that CAN be changed short run: ability of products that CANNOT be changed - monopolistic competition • product differentiation - oligopoly: when a market s dominated by a small number of sellers • results from various forms of collusion • has its own market structure • maximizes proﬁts • price maker high entry barrier • • few number of ﬁrms • long run proﬁts • homogenous or differentiated products • interdependence • no competition on price game theory: decisions made by one ﬁrm inﬂuence and are inﬂuenced by decisions of another ﬁrm. - monopoly: when there is only one supplier of a speciﬁc product • maximizes proﬁts • price maker • high entry barrier • only one seller of the good • can change the prices and quality of a product
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