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Unformatted text preview: Change in Demand vs. Change in Quantity Demand Change in Demand Price D Quantity Change in Quantity demand Price D Quantity Supply-All else being equal higher prices induce greater production and higher output Change in supply caused by- Production technology Resource cost Price of related goods Substitutes in production Joint production Producer expectations # of sellers Taxes, subsidies, regulation Elasticity- y 1-y y 1 +y /2 x 1-x x 1 +x /2 Law of equal advantage- every resource will be used in such a fashion that its productivity at the margin is identical with the use of that resource at every other use. Marginal utility of good x = price of good x Marginal utility of good y = price of good y Marginal utility of any good = marginal utility of another good Price of good = Price of another good...
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This note was uploaded on 03/26/2008 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.
- Fall '07