ECON1-0408

ECON1-0408 - Demanders: organizations willing to hire...

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ECON1 4/8/2009 Why is Demand Curve Downward sloping? - Why would an individual buy less gas per month if price were higher? - Substitution effect: Alternative ways of accomplishing the same ends become relatively cheaper. - Income effect: higher price means lower real income. Buy less of everything, including gas Another example – Labor Market Good: Hours of work at specific type of job Price: Wage ($ per hour) Suppliers: People with certain skills willing to work at specific jobs
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Unformatted text preview: Demanders: organizations willing to hire people with certain skills to work at specific jobs Another Example Credit Market Good: Dollars paid now to be repaid with interest in future Price: Interest rate (%) Suppliers: Lenders who are willing to provide money now in exchange for principle and interest later Demanders: Borrowers who would like money now and will repay principle and interest later...
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