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OU ECON 1123 - Demand curves, Determinants of Demand and Determinants of supply

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ECON 1123 1st Edition Lecture 3 Outline of Last LectureI. Marginal BenefitII. ScarcityIII. Law of DemandIV. Determinants of DemandA. Expectations of Prices B. Preferences/TastesC. IncomeD. Price of Compliments and substitutesE. Expectant incomeOutline Current LectureV. The Circular Flow of IncomeA. Resource MarketsB. Output MarketsVI. Price Determination in Competitive Markets A. DemandB. SupplyVII. Demand/ Determinants of Demand (Review but with some new things added)VIII. Demand CurvesIX. Determinants of SupplyA. Price of the output or resourceB. Prices of the resources used to produce the outputC. TechnologyD. Number of SellersE. Sellers expectation about future pricesCurrent LectureX. The Circular Flow of IncomeC. Resource MarketsThese 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.D. Output MarketsXI. Price Determination in Competitive Markets C. Demand (Defined, Determinants, Graphically)D. Supply (Defined, Determinants, Graphically)XII. Demand/ Determinants of Demand (Review but with some new things added)Demand- The quantities of an output or resource that people are willing (and able) to buy (during some period of time)Flow variable- variable measured over time periodDeterminants of Demand:Note: These are not ALL of the things that could influence demand but they are the mostIMPORTANT-Price of the output resource (how much it the resource costs is going to help you decidehow much to buy)-Buyer’s Incomes-Tastes (Psychological and/or cultural and biological and/or other reasons for buying) *This could be determined by season, holidays, anything that makes a certain product sell more (or less)-Buyer’s expectations (about future prices and/or future incomes *If you think prices willbe going up in the future you will be more likely to buy and vice versa)-Number of Buyers-Prices of Related outputs or related resources (Compliments- outputs or resources that are generally used together) (substitutes- outputs or resources that fill the same need)XIII. Demand Curves- We make a demand curve under ceteris paribus which means we keep all other determinants of demand constant and change the one we want to see the effect of.Note: If you change the demand the whole graph shifts, but if you change the quantity demanded that is not a shift of the graph, rather just a shift up or down on the existing demand curve.Also, the line that the demand curve follows is called a demand schedule.XIV.Law of Demand- As the price of the output or resources increases, the quantity decreases and vice versa.XV. Determinants of SupplySupply- The quantities of an output or resource people are willing and able to sell duringsome time period (supply is also a flow- a movement over time)F. Price of the output or resourceG. Prices of the resources used to produce the output (cost of production)H. Technology (knowledge about producing…like if they develop a new way to produce the same good for a lower cost)I. Number of SellersJ. Sellers expectation about future prices (Can influence their current selling


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