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Unformatted text preview: Chapter 2 Demand Shifters : 1) Income demand increases (for a normal good) when Income increases 2) Price of Substitutes demand increases when substitutes price increases 3) Price of Complements demand increases when complement price decreases 4) Price Expected in the future demand increases when expected future price increases 5) Income Expected in the future demand increases when expected future income increases 6) Preferences demand increases when preference increases in favor of product Supply Shifters : 1) Price of Inputs Supply increases when input prices decrease 2) Technology supply increases when technology increases 3) # of Firms supply increases when # of firms increase 4) Price Expected in the future 5) Price of Substitutes 6) Price of Complements Consumer Surplus- Price consumers are willing to pay minus the price the consumer actually pays (Use: *bh) Producer Surplus- Price received by the producer minus the price the producer is willing to produce the quanti...
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- Spring '11