DOC PREVIEW
U of A ECON 2023 - Demand, Supply, and Equillibrium
Type Lecture Note
Pages 2

This preview shows page 1 out of 2 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

Econ 2023 1st Edition Lecture 3Outline of Last Lecture 1. Pick up from end of last lecture notesa. Simple Economic Model.i. Production Possibility Curveii. Consumer Modelb. Types of Economies.Outline of Current Lecture 1. Wrap up from utility 2. Start on chapter 3 notes dealing with:a. Demand, supply, and equilibriumb. Market behaviors and outcomes.Current Lecture1. More on Utility:a. What about the satisfaction from each individual unit of a good (or service) consumed?i. Concept of marginal utility (MU)ii. Another “bad: “law of” Diminishing marginal utility.2. Markets: One way to organize economic activity. ContinuumPure Market economy (consumer sovereignty)Mixed Economy Pure command economy 3. Summing up:a. Positive Statements: Objective, testableb. Normative statements: subjective, not testablec. Consumer choice: i. Utility: satisfaction from consumption 1. Diminishing marginal utility: shrinking additional satisfactionThese 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.ii. Budget constraint: Restricts consumer choiceiii. Opportunity cost: measure of trade-offsd. Economics systems: ways to organize the economy.Chapter 3: Demand, Supply and Equilibrium.4. Market behaviors and outcomes:a. Demand: to better understand markets and equilibrium, we need to learn more about the nature of demand—what is it that makes people willing and able to buy at any particular price? i. The source of demand: the goal of consumers is to make themselves as well off as possible given the constraints they face. Make decisions on what and how much to buy. ii. Price: 1. “quantity demanded” vs. “quantity”a. Quantity demanded: Amount that consumer wants and are willing to pay for at any given price. 5. “Law of demand”: Quantity demanded is greater when price is low, and quantity demanded is lower when price is high, or an increase in price will lead to decreased quantity demand, and a decrease in price will lead to increased quantity demand. 6. Demand curve: shows the Quantity demanded for each possible price. Inverse relationship between price and quantity demanded. a. Must see that caveat (a warning or proviso of specific stipulations, conditions, or limitations): ceteris paribus. 7. Determinants of demand: tastes and preferences, income (normal good/inferior good can come of it), expectations, prices of other goods, number of consumers.a. Normal good: as income increases, demand increases and vice versus. b. Inferior good: as income increases, demand goes down and vice versus. (ramen-more money not going to buy it that much)c. Prices of other goods: substitutes are used when a price of one good goes up then another good’s demand goes up as well and vice versus. Complements are compliments of each other usually (gas and


View Full Document

U of A ECON 2023 - Demand, Supply, and Equillibrium

Download Demand, Supply, and Equillibrium
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Demand, Supply, and Equillibrium and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Demand, Supply, and Equillibrium 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?