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SC ECON 222 - Supply and Demand

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Econ 222 1st Edition Lecture 1Outline of Current Lecture I. What is Economics? (Micro vs. Macro)II. Supply and Demand (As defined in Econ 221)III. Definitions of related terms.Current LectureI. What is Economics?We define Economics as the study of scarcity In Micro-Economics we look at the individual making a decision, contrary to that, In Econ 222 otherwise known as Macro-Economics we look at the economy as whole, and decision making based off of thatSome Questions that might be asked throughout Macro-Economics would include:1. Why are some countries richer or poorer than others?2. What is inflation and what causes it?II. Supply and DemandDemand (D) – The height of the Demand Curve represents the maximum willingness to pay for agood or service These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. The demand line is always downward sloping. Be sure to Label the line as DDWhat determines Demand:1. Price of the Good2. Preferences3. Price of other goods4. Income/Wealth5. ExpectationsSupply (S) – The minimum willingness to accept for any good or serviceWhat determines Supply?1. Costs of the inputs2. Price of the good3. Price of related products (the more options you have, the higher your minimum to accept is)III. Related TermsSubstitutes – Pepsi is a substitute for cokeCompliments – Goods that go together like peanut butter and jellyComparative Advantage – Theory that defines why we trade. States that whoever has the lowestopportunity cost is the person who should produce a good or


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SC ECON 222 - Supply and Demand

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