CHAPTER 3 NOTES - E conomics Chapter 3: Demand, Supply, and...

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Economics Chapter 3: Demand, Supply, and Market Equilibrium Market- An institution that brings together buyers and sellers. Demand- A schedule or curve that shows various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time. Demand Schedule- Hypothetical schedule for a single consumer purchasing. Law of Demand- A negative or inverse relationship between price and quantity demanded. Relative Price- If relative price rises- fewer products (of a specific product) will be bought. However, if the price and all other prices competing change by the same amount , consumers may buy less of a specific product. Diminishing Marginal Utility- The lessened value of a product during a specific time. 1 st Big Mac is great and the 2 nd has less value. Income Effect- Indicates that a lower price increases the purchasing power of a buyer’s money income, enabling the buyer to purchase more of the product than before. Substitution Effect-
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This note was uploaded on 10/01/2010 for the course ECO 2013 taught by Professor Haroldj.vanboven during the Fall '09 term at Edison State College.

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CHAPTER 3 NOTES - E conomics Chapter 3: Demand, Supply, and...

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