Ch 3 -- terms and concepts

Ch 3 -- terms and concepts - Things that cause Supply to...

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Ch. 3 – Terms and Concepts Demand: Law of demand difference between a change in D and a change in Qd elasticity of demand consumer surplus marginal utility height of the demand curve things that cause demand to shift – number of consumers in the market – income * normal goods * inferior goods – price of related products * complementary goods * substitute goods – expectations – tastes and perferences Supply: law of supply difference between a change in S and a change in Qs elasticity of supply producer surplus marginal cost height of the supply curve
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Unformatted text preview: Things that cause Supply to shift: – Cost of Production – Changes in technology – Number of sellers in the market – Natural disasters – Tax policy What determines price in a competitive market in the absence of government intervention? What causes shortages (or excess demand)? How do you eliminate a shortage? What causes surpluses (or excess supply)? How do you eliminate a surplus? The Invisible Hand principle. Do we need government intervention to set price in a competitive market?...
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This note was uploaded on 04/02/2012 for the course ECO 2013 taught by Professor Slate during the Fall '10 term at Florida State College.

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