ARE 100A1

ARE 100A1 - ARE 100A CH 1 2 review from 1a 1 Demand issue a...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
ARE 100A CH 1, 2 review from 1a 1. Demand issue a. b. deltaQ/DeltaP is negative.
Background image of page 1

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

View Full DocumentRight Arrow Icon
c. Demand determinants list i. Product’s own price #1 1. price of pretzels ii. other product prices #2 1. ex. of competing goods 2. substitutes in consumption 3. compliments in consumption (fries and ketchup) iii. income #3 iv. taste and preferences #4 d. demand shifters (changes in these will shift the actual demand curve) i. other product prices ii. income iii. taste and preferences. e. Substitutes in consumption i. Consider 2 substitutes X and Y ii. DQx/ dPy iii. If price of Y goes up, demand for Y doesn’t change! 1. only quantity demanded iv. but then demand for X increases. v. Ex. 1. X= potatoes 2. Y= rice 3. f. compliments in consumption i. X= car ties
Background image of page 2
ii. Y= cars 1. if the products are compliments, the price of cars goes up, quantity of cars demanded decreases and quantity of tires demanded decreases, and SHIFTS the demand for tires left g. income i. 2 types of goods 1. normal good a. deltaQ/Delta I is positive b. as income goes up, demand goes up c. 2. inferior good a. deltaQ/Delta I is negative b. as income goes up, demand goes down c. i. ex. mac and cheese, shift to steak as you get richer.
Background image of page 3

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

View Full DocumentRight Arrow Icon
d. Note: h. Comment- engel curve i. 2. tastes and preferences a. utility/satisfaction i. problem: not measurable ii. influenced by advertisements (folgers is better coffee bc it’s mountain grown and will wake you up) 3. Supply
Background image of page 4
b. Determinants i. Price of product 1. it’s a supply shifter, not a curve shifter. ii. Prices of other producible products 1. substitutes in production 2. compliments in production a. ex. your grower in yolo country b. you could grow cotton cloth and cotton seed at the same time iii. important input costs iv. technology v. government c. ex i. x= alfalfa ii. y= tomatoes 1. ∆Qx/∆Py 2. they are substitutes in production 3. so ∆Qx/∆Py is negative
Background image of page 5

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

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/11/2009 for the course ARE 144 taught by Professor Johnson,e during the Spring '08 term at UC Davis.

Page1 / 20

ARE 100A1 - ARE 100A CH 1 2 review from 1a 1 Demand issue a...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online