ECON 221 1st Edition Lecture 3 Outline of Last Lecture I. Big Ideas (cont.)a. The Importance of Wealth and Economic Growthb. Institutions Matterc. Final Big IdeasOutline of Current Lecture I. Supply and Demanda. Markets and Competitionb. Demandc. Individual Demandd. Shifts in Demand CurveCurrent LectureChapter 3: Supply and Demand- Markets and Competitiono Market: group of buyers and sellers of a particular good or serviceo Buyers Determine the demand for the producto Sellers Determine the supply of the productThese 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.- Demando A demand curve is a function that shows the quantity demanded at different priceso Quantity demanded: the quantity of a good that buyers are willing and able to buy at a particular priceo Law of Demand: Other things equal, when the price of a good rises, the quantity demanded of that good falls, and when the price of a good falls, its quantity demanded rises- Individual Demando Demand Schedule: a table that shows the relationship between the price of a good and its quantity demandedo Ex.: Helen’s demand for lattes- Shifts in the Demand Curveo Demand curve shifts when something alters the quantity demanded at any given priceo Increase in demand vs. increase in quantity demandedo Decrease in demand vs. decrease in quantity demandedo 5 reasons Income— Normal good and Inferior good Population Price of Substitutes Price of Complements Expectations
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