ECN211 L3 Demand_BB - ECN 211 Macroeconomic Principles L3...

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1 ECN 211 Macroeconomic Principles L3: Demand
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2 Markets Market … a place or service that enables buyers and sellers to exchange goods and services Two Types of Market ________ location – agricultural markets _________ locations - Stock market
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3 ___________ _________ … direct exchange of goods and services without the use of money Creates a difficult problem to enable exchange - ________________________ Can then lead to ___________________
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4 Transaction costs Transaction costs … cost involved in making an exchange Costs of _____ and _____________
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5 Double coincidence of Wants Person Wants Has Harry Potter The Ring An invisibility  cloak Frodo An annoying  Donkey The Ring
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6 The Usefulness of Money The existence of money makes the whole process easier Money is: A __________________ A _________________ A _________________
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Nominal Price Nominal price is the  ___________ of goods and services. E.g. In the US it is the  ___________ of goods and services. – The nominal price of a soda is $1.25. – The nominal price of a gallon of gas is $4.00.  7
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8 Relative Price The price of one good ______________
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