{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Macroeconomics - U R I N GP R I C EL E V E L.conomics ho of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
DEMAND . 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 futurcconsLrmption. SUPPLY . Supph Curve: A cLrrve (tablc)showing the quantities of a gooda 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'otherproduced 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. MARKET EQUILIBRIUM . Equilibrium: I henprice 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 blackrrrarkct 2. l-'loor aboi e cquilibnunr - surplus ancl chcating (secret sale-s ) . Changes In Equilibrium: F.clLrilihriurn price u'ill change r,r'hener,'er the suppll, or clcnrand curre shifts, SUPPLY '"" Equilibrium DEMAND [.conomics: The str"rd-v.- of hou' scarce resources are .: ..'..r1-'tl .rnr()nS competrng uses. ho F-conomic Questions Include: \\ r.rt l: produced'.) I il,,rr r: lt produced'.) : \\:r,,lcls \\hat is produced'J t, R0I)T (--I-IO\ POSSIBILITY FRONTIER: I :r,' .rll"rnatrr c cor"nbinationsof final goods and ..': . r!c: that could be produced in a given tinte period ,' ::r .tll .rrlilabl.- and lirnited resources and technology. I l.i:lrrrlc-r rlpportunitV cost: Obtaining more production ,; ',11s'g1r1rd rL-quires a reduction in the production (lost ,'rn\\rtulllt\ ) of'one or more other goods. - l.r',r trl' rncrt-'asing opportunitv cost means that .:.:.lilIltg llrore of a good requires giving up e\er .r:=JI Jl11r'rl.u1ts Of the alten]atiVegood. : I nsidc frontier: Unemnloved resources :r i ll lc l!'rlC\). : t rpanding frontier: Increases in resources and '.'. :rirolosrciil advances. . t ..'.\)lrrrnl\ produccs only 2 goods (X.Y). Points on ' J !-ir\c r.\.B.C.D) represent different cornbinatiotts :::rc I goods $'hen all resources are used (full - ::..,rr nrL'nt of resources). If the allocation is inside the -..: .,'. :r)rllr- rCSOurCes are not used Or used : 1 , ' : : ! a l c l t t l \ .
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}