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Unformatted text preview: change in price? a. The availability of close substitutes b. The fraction of income spent on the good c. The unit of time a. With the passage of time, the response to a given change in price becomes absolutely greater. (This is sometimes referred to as the 2 nd law of demand) 3. Demand determinants a. Inferior goods. A good for which demand decreases as income increases. b. Substitutes: two goods for which the demand of one good increases as the price of the other good increases. c. Complements: two goods for which the demand of one good increases as the price of the other good decreases. 4. Shipping the good apples out a. The theorem is so named due to the empirical observation that supermarkets in apple-importing areas have a higher proportion of high quality apples than supermarkets in apple-growing areas....
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This note was uploaded on 04/05/2008 for the course ECON 201 taught by Professor Wadell during the Winter '08 term at Oregon.
- Winter '08