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Jingxian TA3 - ECON1110 TA Section 3 Professor Jennifer...

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ECON1110 TA Section 3 Professor Jennifer Wissink TA Jingxian Zheng Feb 5, 2009 1 Concepts Review 1. Demand v.s. Supply (output market) Demand Supply Q D X = f ( P X ) Q S X = g ( P X ) Q D X : max No. the buyers Q S X : max No. the sellers are willing and able to buy are willing and able to sell P S -Price of substitute good P fop - Price of factors of production P C -Price of complementary good P oc - the opportunity cost I -Income S & T - Science and Technology T & P - Taste and Preference N - No. of firms in the market Pop - Population The Law of Demand The Law of Supply negative relationship b/w Q D X and P X Positive relationship (downward curve) (upward curve) 2. Movement (along a curve) v.s. Shifts (of a curve) Change in price ( P X ) = change in quantity demanded/supplied Change in ( I , P S , P C , T & P , Pop Change in demand P fop , P oc , S & T , N Change in supply 3. Normal goods v.s. Inferior goods: Normal goods: Goods for which demand goes up when income is higher and for which demand goes down when income is lower.
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