ECON20023 T1 2008 Lecture 2(1)

ECON20023 T1 2008 Lecture 2(1) - ECON20023 ECONOMICS FOR...

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Based on slides from Layton et al ( 1 ECON20023 ECONOMICS FOR BUSINESS T1 2008 LECTURE 2 Galina Ivanova, CQU
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Based on slides from Layton et al ( 2 Chapters 3 and 4 Chapter 3 Supply and demand are key economic models How the model of supply and demand works and how to use it Chapter 4 Markets in action Changes in market equilibrium Can the laws of supply and demand be repealed Market failures
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Based on slides from Layton et al ( 3 Chapter 3: Key concepts     What is demand?   What happens to demand if price changes?   What happens to demand if other factors change?    What is supply?   What happens to supply if price changes?   What happens to supply if other factors  change?   What is market equilibrium?   What causes changes in market   equilibrium?
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Based on slides from Layton et al ( 4 The law of demand The principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus ‘Ceteris paribus’ - all other things remain unchanged. A demand schedule shows the specific quantity of a good or service that people are willing and able to buy at different prices. The demand curve shows the relationship between price and quantity demanded.
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Based on slides from Layton et al ( 5 Individual demand curve and schedule
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Based on slides from Layton et al ( 6 What is market demand? Market demand is the summation of the individual demand schedules.
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Based on slides from Layton et al ( 7 Market demand curve
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Based on slides from Layton et al ( 8 Market demand
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Based on slides from Layton et al ( 9 Movement along the demand curve
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Based on slides from Layton et al ( 10 If other factors change Changes in non-price factors produce a change in demand - a shift of the demand curve. An increase in demand is a rightward shift of the entire demand curve. A decrease in demand is a leftward shift of the entire demand curve. Changes in demand are brought about when the non- price determinants of demand change.
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Based on slides from Layton et al ( 11 Non-price determinants Non-price determinants of demand include: Number of buyers in the market Tastes and preferences Income Consumer expectations Prices of related goods.
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Based on slides from Layton et al ( 12 Shifts in demand
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ECON20023 T1 2008 Lecture 2(1) - ECON20023 ECONOMICS FOR...

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