Macroeconomics - D E M A N D . Demand Curye (Schedule): A...

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Unformatted text preview: D E M A N D . Demand Curye (Schedule): A curve (tablc) showing the quantities of a good a consurrer is u'illing and ablc to buy at alternative prices ,r.rir r'n constant tastcs. incomes. relatcd prices. and nurnber of bLrycrs. . Law of Demand: Increase in price (P) causes decrease in quantity' (Q) dcrnanded. . Change in demand: Change in tastes^ pricc of'rclatcd goocls. ir.rcorne. increase in nutnber of bu'n'ers: alters planncd consurnption at all prices. shifiing curve to riglrt (incrc-asc) or lefi (decrease). . Change in quantitl' demanded: (-atised br tr*n Irrtcc change and results in morcnrcr.rt along curve . . Related prices: Inclr"rclc prices ol cotnpletnents or substitutes inclLrding futurc consLrmption. SUPPLY . Supph Curve: A cLrrve (tablc)showing the quantities of a good a seller is rvilling and ablc to sell at alterrtltire priees at a given cost of production cietenriinecl bv constant input prices. technologl,. and nurnbcr of sellers. . Lall of Supply: Increasc in price (P)causes rrrcrease iu quantity (Q) sLrppliecl . Change in supply: Cihange rn cost ol' production. technologv. pricc of'other produced coods: number of sellers alters planned sales at all prices. shifting culve to right (increase) or left (decrease). . Change in quantitv supplied: C'aused by ovr n pric.' change and results in moverncnt alon-u curre. M A R K E T E Q U I L I B R I U M . E q u i l i b r i u m : I h e n p r i c e p is established where quantity clemanded 1Pe) - quantrty supplied 1Qe). . Properties of Equilibrium: H L P>Pc. surplus 2. P<Pc. slrortage 3. P-P., stable . Price C.lontrols: I . ('cilin-q bclou cquilibriunr -. shorta-uc and black rrrarkct 2. l-'loor aboi e cquilibnunr - surplus ancl chcating (secret sale-s ) . C h a n g e s I n E q u i l i b r i u m : F . c l L r i l i h r i u r n p r i c e u ' i l l change r,r'hener,'er the suppll, or clcnrand curre shifts, S U P P L Y ' " " E q u i l i b r i u m D E M A N D [.conomics: The str"rd-v.- of hou' scarce resources are . : . . ' . . r 1 - ' t l . r n r ( ) n S c o m p e t r n g u s e s . h o F - c o n o m i c Q u e s t i o n s I n c l u d e : \ \ r . r t l : p r o d u c e d ' . ) I i l , , r r r : l t p r o d u c e d ' . ) : \ \ : r , , l c l s \ \ h a t i s p r o d u c e d ' J t , R 0 I ) T ( - - I - I O \ P O S S I B I L I T Y F R O N T I E R : I : r , ' . r l l " r n a t r r c c o r " n b i n a t i o n s o f f i n a l g o o d s a n d . . ' : . r ! c : t h a t c o u l d b e p r o d u c e d i n a g i v e n t i n t e p e r i o d , ' : : r . t l l . r r l i l a b l . - a n d l i r n i t e d r e s o u r c e s a n d t e c h n o l o g y . I l.i:lrrrlc-r rlpportunitV cost: Obtaining more production ,; ',11s'g1r1rd rL-quires a reduction in the production (lost , ' r n \ \ r t u l l l t \ ) o f ' o n e o r m o r e o t h e r g o o d s ....
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This note was uploaded on 02/01/2009 for the course ACTG 6610 taught by Professor Ward during the Spring '09 term at Middle Tennessee State University.

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Macroeconomics - D E M A N D . Demand Curye (Schedule): A...

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