ECON 1101 1st Edition Lecture 6 Outline of Last Lecture I Supply Curve a Law of Supply b Causes of Supple Shifts i Price of Input ii Number of Sellers iii Technology Outline of Current Lecture II Wrap up of Supply and Demand III MobLab Experiment Discussion IV Introduction to Elasticity a Kinds of Change Current Lecture I II Wrap Up of Supply and Demand a If just the demand shifts the price of substitute shifts i EXAMPLE coke has a recall the demand for pepsi increases and the price of pepsi increases b If they both shift such as the price and the substitute change i Without the value it is impossible to know how much each has changed to make an exact prediction MobLab Experiment Discussion a Our market was moved by an invisible hand that caused us to move towards equilibrium b Sellers typically do worse c The key is to SELL when buyers are unsure 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 III d Explained experimental data graphs Elasticity a Last class we discussed the DIRECTION of effects b Beyond direction we want to know the magnitude of the shifts movements i Example the Quantity goes down when the price increases but BY HOW MUCH c Elasticity Responsiveness of supply and demand to change i For right now we will only look at demand d What Kinds of Change i Price ii Income iii Price of Related Good e We want to have a way of comparing goods f Less important goods are more elastic i We cannot find by using slope because the units would be off ii We get units by using percentages
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