Lecture Notes Introduction

Rational people think at the margin rational people

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Unformatted text preview: bjectives marginal return- think at the margin- 4. people respond to incentives incentive- something that induces a person to avym i.e. the prospect og a reward or punishment ~rational people respond to incentives: when gas prices rise, consumers buy more hybrid cars and fewer gas guzzling SUVs Perfectly competitive market: identify the good, huge number of buys and huge number of sellers. The product is no different among the sellers. Monopolistic market: huge number of buyers, one seller DEMAND Variable Price # of buyers income price of related goods tastes expectations A change in this variable causes movement along the D curve shifts the D curve shifts the D curve shifts the D curve shifts the D curve shifts the D curve SUPPLY Variable price input prices technology # of sellers expectations a change in this variable movement along the S curve shifts the S curve shifts the S curve shifts the S curve shifts the S curve...
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This note was uploaded on 01/12/2014 for the course ECON 202 taught by Professor Hammond during the Fall '11 term at Boise State.

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