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Unformatted text preview: wealth x Tastes and preferences (ex. fewer smokers) x Prices of other goods x Expectations (of future income, wealth and prices) Income – a flow – sum of all earnings (wages, salaries, profits, interest payments, rents, etc.) in a given period of time Wealth – a stock – total value of what household owns minus what it owes Substitutes – when price of good X rises, demand for good Y rises (ex. cigs & rolling tobacco) Complements – when price of good X rises, demand for good Y falls (ex. pasta & sauce) Page 35...
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This note was uploaded on 12/29/2011 for the course ECO 311 taught by Professor Willis during the Fall '10 term at SUNY Stony Brook.
- Fall '10