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1.20.10 - Lecture Notes Econ 201

1.20.10 - Lecture Notes Econ 201 - Table that shows the...

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1.20.10 – Lecture Notes, Econ 201 Basic Economic Choices: What & How Much? How? For Whom? Alternative Economic Systems Command Market Organization Centralized Decentralized (One power choosing) (We choose as consumers) Resources Public Private [Ownership] (Government owns everything) (You Own) Most economies go toward the market economy. ADAM SMITH 1776 – The Wealth of Nations “Invisible Hand” - Prices - Markets CIRCULAR FLOW DIAGRAM Firms $ Households Resources Firms Goods & Services Households $ Firms (In a circle position) Households supply the firms demand for resources (work) and money Firms supply household’s demands with income & goods/services Product Market: Demand Product: Beverage Soda Pop: 50 gallons/year Cola: 55% Determinants: Q Demand of Jones Soda = Price Jones Taste (Physical & Interests) – Income Price of similar goods
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Unformatted text preview: Table that shows the relationship between the price of the good and the quantity demanded JONES SPARTAN SODA Price/Bottle Quantity When It Makes Quantity DEMANDED You Smarter DEMANDED $1.00 2 5 $0.75 4 8 $0.50 6 15 $0.25 10 20 THE LAW OF DEMAND: The Law of Demand says that a decrease in a good’s own price will result in an increase in the quantity demanded, holding constant all the other determinants of demand. The Law of demand says that demand curves are inversely related (negative slope) CHANGE IN QUANTITY DEMANDED Change along the demand curve. CHANGE IN DEMAND Entire shift of the Demand Curve either outward (right) or inward (left) DEMAND DETERMINANTS Q DJ = P J (Taste)(Income)(P O ) The PRICE in the product DOES NOT affect the entire shift of the demand curve....
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1.20.10 - Lecture Notes Econ 201 - Table that shows the...

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