E303lect10F09

E303lect10F09 - September 13, 2008 Reading Baye, Ch 2. pp...

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September 13, 2008 Reading Baye, Ch 2. pp 46-51 Problem #3 due Wednesday Lecture 10 REVIEW___________________________________________________: II. Chapter Market Forces: Demand and Supply A. Overview 1. Models and Economics 2. The structure of the supply and demand model. B. The Demand Side . 1. Motivation: Diminishing marginal utility: 2. Definition of Demand Curve 3. Determinants of Demand . PREVIEW_____________________________________________ 4. Changes in demand vs. changes in qty demanded 5. The notion of consumer surplus 6. An analytical example C. The Supply Side. 1. Driving Force. The Law of Diminishing Returns 2. Definition: Supply Curve LECTURE___________________________________________________ 4. Changes in demand vs. changes in qty demanded. When one of the non-price determinants of demand changes, it is necessary to draw a new demand schedule. This is known as a change in demand (schedule). When there is a change in price, other things held constant, this is called a change in quantity demand (a movement along a schedule) Example, consider Q d = f(P, P s , P c , I) This is a demand function . It is a relationship between quantity demanded, and the entire collection of elements that determine sales quantity. The
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E303lect10F09 - September 13, 2008 Reading Baye, Ch 2. pp...

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