Chapter 2 Notes

# Chapter 2 Notes - EUB tutoring sessions Website...

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EUB tutoring sessions: Website- http://depts.washington.edu/ecnboard/ Monday: 12:30-1:30, 1:30-2:30, 3:30-4:30 Tuesday: 10:30-11:30, 11:30-12:30, 12:30-1:30, 1:30-2:30 Wednesday: 11:30-2:30 Thursday: 10:30-11:30, 1:30-3:30 Thursday, 10-7-10 Chapter 2 Review Notes Assume that preferences of individual consumers stay stable. Attribute changes to constraints, such as loss of income. Demand curves are on the vertical axis, has quantity on horizontal-inverse demand curve. In typical curve, x is the exogenous variable. Y is the endogenous variable. (Exogenous is independent, endogenous is dependent). Alfred Marshall is the one who first did the curve. ..except he did it backwards. Q is the exogenous variable and Price is the endogenous variable, although that is incorrect because you would usually use the price as the independent variable. Quantity is response to Price, so it SHOULD be the endogenous variable. Demand curves slope downwards. The lower the price, the more the consumer wants to purchase in quantity. Higher prices, less quantity. Supply…also Price is endogenous and Quantity is the exogenous. Supply curves tend to slope upwards, in order to get more producers to produce, they have to be paid more. In case of suppliers, they are willing to bring more to market if they get higher prices per

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## This note was uploaded on 11/19/2010 for the course ECON 200 taught by Professor Ta during the Fall '07 term at University of Washington.

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