03 01 2014 Economics Class notes Cost vs opportunity cost o Differ in their measurement Cost Opportunity cost sacrifice Ex time spent Explicit vs implicit cost o Explicit Cost o Implicit Ex money spent at a movie theater for ticket Opportunity cost Ex he could have studied for his exam more that Inverse vs direct relationship was the next day o Inverse o Direct Negative slope decrease Positive slope increase Specialization of resources increasing cost curve outward of production possibility frontier menu of options vs actual combination of outputs produced o options available whole curve and inside the curve graph of the curve when options are available o o o o o o technology break through graph o o o o o quantity of demand o what consumers would LIKE to have but not necessarily obtain it influences 1 Price negative relationship 2 Price of other competitive product substitute o positive e g starbucks and the coffee shop mcdolands wendys train and bus complements o negative e g chips and salsa meat and buns 3 Quality taste and preference 4 Income normal goods o positive relationship buy INCREASES inferior goods o negative relationship increases amount buyers increases amount buyers buy DECREASES ex train instead of tax o positive relationship with price and newness the need for it expectation of price population of consumers income o positive shift of CURVE recession labor force growth recovery technology Shift of POINT price change change in the influence on the product the other thing equal condition o there are different periods being looked at multiple variables not accurate violates the law of demand seller incentive o influences technological advances positive relation transportation negative resource cost negative price of product positive taxation negative price of alternative negative number of sellers positive shortage and surplus o supply rises o price goes down o quantity goes up demand rises o price increases o quantity increases total change o price o quantity increases pushed up decrease price control o price floor support surplus ex minimum wage 1 if supply and demand shift by the same amount then the price is constant 2 if demand rise by more than supply the price will be 3 if supply rise by more then demand the price will 03 01 2014 03 01 2014
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