Washburn3. August 26, 2014Econ 101- Turchio Product Possibilities Frontiero The PPF can move in if an event causes the inputs for the product to be lessened or destroyedo If inside the frontier instead of on the line, the economy in not fully efficiento Moving from A to B has no opportunity cost because nothing is lostA Bo Two sides of the marketo Demando Desire does not equal demando Demand is desire coupled with the ability to payo Demand units are per…o Montho Yearo Weeko What determines demando Taste or preferenceso Fashiono Size of populationo Income of the average household-> Expected incomeo Distribution of Income among householdo Price of the commodity in questiono Price expectationso Price of other commoditieso Competitiono Goods in tandem impact priceso Peanut butter price goes up, demand for jelly decreaseso 3 Product Relationshipso SubstitutesEfficiencyWashburno Complementso Unrelatedo Q=F(T, POP, I, DI, P, PA, PE…)Ceteris Paribaso CumquatooooooooooooooAs price goes up, demand goes downo Any movement along a stationary demand curve is called a change in quantity demandedo Any shift in the demand curve is called a change in demando A change in demand involves a change in one of the other typically stationary valueso Often just price-quantity combinations are availableo The other factors of the market are often not available to economistso Different types of goods as they relate to incomeQuantityNormalNecessityInferiorIncomeo Supplyo Supply Determinantso Goals of the firmo State of technologyo Price of the commodityo Price of other commodities60 70 80 90 100 110 120020406080100120140Demand Curve for Cumquats1000's of Tons demanded per monthPrice of CumquatsWashburno Input
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