Popular in Principles of Economics: Macroeconomics
Popular in Economcs
This 5 page Class Notes was uploaded by Sidney Hong on Wednesday September 30, 2015. The Class Notes belongs to ECO 106 at Pace University taught by Cesar Castope in Fall 2015. Since its upload, it has received 35 views. For similar materials see Principles of Economics: Macroeconomics in Economcs at Pace University.
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Date Created: 09/30/15
Fall 2015 Principles of Economics Micro ECOlO6 CRN 72490 MondayWednesday 900 AM 1025 AM Professor Cesar Castope 0928 Demand amp Supply Demand D o Willingness and ability to purchase the goodservice o How likely one is to buy something 0 LaW of Demand LoD 0 Price P is proportional to the quantity demanded Qd 0 When price increases the quantity demanded decreases 0 There is an inverse relationship between price and the quantity demanded 25 m 2 2 g Price i E 15 E Deellnea It I 3 quot5 1 E 39ZILIEII39Il39i1quotbIr E 5 Demanded Inereaeee F I I I 39 I I I I I I n 4 H 12 1e Eluantity r Demanded NonPrice Determinants o Tastes and preferences 0 Population 0 Income 0 Consumer Con dence 0 Brand identity 0 Price of related goods 0 ComplementarySubstitutes 0 Future Expectations Cit Nrr al at l fsEerir39 En Elf 0f 1 r 1 Qt of Bi D Cit of K Normal Goods As income increases the quantity demanded increases Inferior Goods As income increases the quantity demanded decreases Substitute Goods Services 0 As the price of product A increases the quantity demanded of produce A Will decrease While the quantity demanded of product B Will increase eg CocaCola ys Pepsi it Hi Price Price CocaCola PE I I I I P1 a n nilquotnu n l 39 a E p tr i l I II In E 112 I Quantity Quantity Complementary Goods Services 0 As the price of product A increases the quantity demanded of produce A Will decrease as well as the quantity demanded of product B Supply S o Willingness and ability to produce goodsservices 0 How likely one is to supply something LaW of Supply L08 0 Price P is proportional to the quantity supplied Qs 0 When price increases the quantity supplied increases 0 There is a direct and proportional relationship 25 In El E E F me I E 15 I Deellnee I I 339 quota 39 39 39 39 39 39 39 quot E i Quantityr E E 5 Supplied Decreases 5 a I I I I I I I I I I 4 H 12 1E Quantity Supplied NonPrice Determinants 0 Cost of resources inputs 0 Wages 0 Technology 0 Natural disasters 0 Future eXpectations of price Assignments 0 Supply and demand exam on October 7 0 EconLab and blackboard homework 2 and quiz 2 Fall 2015 Principles of Economics Micro EC0106 CRN 72490 MondayWednesday 900 AM 1025 AM Professor Cesar Castope 0930 Exchanges amp Markets Opportunity Cost 0 The opportunity cost of an item is what you must sacri ce to get the item To get more of one item you must sacri ce some other item Comparative Advantage 0 Trade is based on comparative advantage the ability of one person or nation to produce a good at a lower opportunity cost than another person or nation Absolute Advantage o The ability of one person or nation to produce a product at a lower resource cost than another person or nation Principle of Voluntary Exchange 0 A voluntary exchange between two people makes both people better off Import 0 Good or service produced in a foreign country and purchased by residents of the home country 0 An example of an import would be a Hyundai car which is produced in Korea and sold in the United States Export 0 Good or service produced in the home country and sold in another country 0 An example of an export would be agricultural products produced in the United States and sold in other countries Market Economy 0 One in Which people specialize and exchange goods and services in a market There are a number of inventions that help markets work better 0 Contracts Specify terms of exchange and rights and obligations of the parties to the exchange 0 Insurance Reduces the risk from low probability random events such as res 0 Patents Encourage innovation in neW products 0 Accounting rules Provide a common set of information on the nancial status of rm Centrally Planned Economy 0 One in Which a government bureaucracy decides how much of each good to produce how to produce the good and Who gets the goo o In a market system these same decisions are made in a decentralized manner With prices providing the information about relative scarcity and the incentive to provide goods by means of higher prices for goods that are relatively scarce Assignments due 1002 0 Supply and demand exam on October 7 0 EconLab and blackboard homevvork 2 and quiz 2
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