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Unformatted text preview: 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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This note was uploaded on 09/19/2009 for the course ECON 101 taught by Professor Burkhauser during the Fall '08 term at Cornell University (Engineering School).
- Fall '08