micro - Economics HL Notes Graeme...

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Unformatted text preview: Economics HL Notes Graeme (graemestanding@hotmail.com) [ 1 ] Section 2: Microeconomics Contents Definition of markets ......................................................................................................................... 4 Importance of price as a signal and as an incentive in terms of resource allocation ........................... 4 Demand ............................................................................................................................................ 4 Law of demand with diagrammatic analysis ................................................................................... 4 Exceptions to the law of demand (the upward-sloping demand curve) .......................................... 5 Determinants of demand ............................................................................................................... 6 Supply ............................................................................................................................................... 7 Law of supply with diagrammatic analysis...................................................................................... 7 Determinants of supply ................................................................................................................. 8 Interaction of demand and supply ..................................................................................................... 8 Price controls .................................................................................................................................... 9 Maximum price / price ceiling ........................................................................................................ 9 Minimum price / price floor ........................................................................................................... 9 Buffer Stock Scheme .................................................................................................................... 10 Commodity agreements .................................................................................................................. 11 Price elasticity of demand (PED) ...................................................................................................... 12 Determinants of price elasticity of demand ................................................................................. 12 Cross Elasticity of Demand............................................................................................................... 13 Income Elasticity of Demand ........................................................................................................... 13 Price Elasticity of Supply .................................................................................................................. 13 Determinants of Price Elasticity of Supply .................................................................................... 14 Applications of Concepts of Elasticity............................................................................................... 14 Applications of Concepts of Elasticity....
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micro - Economics HL Notes Graeme...

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