• 5 Pages

#### B200.F08.W04.Clsnts

Excerpt: ... the marginal value of any good declines, we can then plot to amount of the good an individual would be willing to buy at alternative prices by comparing marginal value with the Price in the market place. From this analysis we derive the Demand for a good. \$ Price 8 6 4 2 24 6 8 10 12 14 16 18 20 QTY/ Time period Demand 3. DEMAND: A schedule of the alternative quantities that an individual is willing and able to buy at alternative prices. (* Definition) A. First Law of Demand: the lower the price of a good, the greater the quantity demanded, the higher the price, the lesser the quantity demanded. : Demand curve slopes downward. B. Change in Demand vrs. Change in Quantity demanded Demand traces the different amounts we would buy at different prices. A change in price is a movement along the demand schedule. A change in something other than price will shift the curve. An increase in demand means larger amounts purchased at any price, thus a rightward shift of the curve. C. Determinants of Individual Dema ...

• 17 Pages

#### SQ3_KEY

Virginia Tech, ECON 2006

Excerpt: ... likely take place? 1. a downward shift of the aggregate expenditure line and a rightward shift of the AD curve 2. a downward shift of the aggregate expenditure line and a rightward shift of the AD curve 3. an upward shift of the aggregate expenditure line and a leftward shift of the AD curve 4. an upward shift of the aggregate expenditure line and a rightward shift of the AD curve [16]If the Fed conducts an open market purchase of bonds, which of the following will happen? 1. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift rightward. 2. The interest rate will decrease, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift rightward. 3. The interest rate will increase, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift leftward. 4. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shif ...

• 2 Pages

#### studyguide1spring2008eco111

West Chester, ECO 111

Excerpt: ... chedule The law of a demand: The negative relationship between price and quantity demanded. What determines the demand? Change in Demand: When the determinants of demand, other than the price of the good, change, there is a change in demand. (Shift of the demand curve) An increase in Demand means a rightward shift of the demand curve A decrease in the demand means a leftward shift in the demand curve Movement along the demand curve: When the price of the good changes, there is a movement along the demand curve (No change in demand). Supply: It refers to the entire relationship between the quantity supplied and the price of a good as illustrated by supply schedule and supply curve. Supply Schedule: A table that shows the quantity supplied at each price level Quantity Supplied: the amount of a good that seller are willing to sell. Supply curve: A graphical representation of supply schedule The law of a supply: The positive relationship between price and quantity supplied. What determines the supply? Change ...

• 3 Pages

#### LECTURE%20NOTES%2011

German University in Cairo, ECON 101

Excerpt: ... University of Modern Sciences & Arts (MSA) Dr. Heba Helmy Aggregate demand and aggregate supply/exercise ECO-101 Lecture notes 11 SHIFTS IN THE AGGREGATE DEMAND AND AGGREGATE SUPPLY CURVES SHIFTS IN THE AGGREGATE DEMAND (AD) CURVE AN INCREASE IN AGGREGATE DEMAND PRICE LEADS TO A RIGHTWARD SHIFT IN THE LEVEL AD CURVE RESULTS IN: - EQ.PRICE LEVEL RISES - EQ. QUANTITY (REAL GDP) MAY BE CAUSED BY: - INCREASE IN G (FISCAL POLICY OR WAR OR OTHERS) - RISE IN C - RISE IN I - FALL IN TAXES (FISCAL POLICY) WHEN T FALLS, C RISES, I RISES - INCREASE IN MONEY SUPPLY MONETARY POLICY) WHEN M2 RISES, i FALLS, I RISES IF EQ. OUTPUT RISES ABOVE POTENTIAL OUTPUT, INFLATION TAKES PLACE.( e.g. DURING VIETNAM WAR) A DECREASE IN AGGREGATE DEMAND LEADS TO A LEFTWARD SHIFT IN THE AD CURVE RESULTS IN: - EQ. PRICE LEVEL FALLS - EQ. QUANTITY (REAL GDP) FALLS MAY BE CAUSED BY: - FALL IN G (FISCAL POLICY) - FALL IN C (FALL IN ASSET VALUE) - FALL IN I - RISE IN TAXES ( FISCAL POLICY) WHEN T RISES, C FALLS, I FALLS - DECREASE IN M2 (M ...

• 32 Pages

#### CH11

VCCS, ECO 201/202

Excerpt: ... n increase (decrease) in the price levels shifts the aggregate expenditures schedule upward (downward). D) an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward). 19. An increase in aggregate expenditures resulting from a decrease in the price level is equivalent to a: A) rightward shift of the aggregate demand curve. B) leftward shift of the aggregate demand curve. C) movement downward along a fixed aggregate demand curve. D) decrease in aggregate supply. Use the following to answer questions 20-21: Page 4 20. Refer to the above diagrams. A decline in aggregate expenditures from AE2 to AE1 resulting from the realbalances, interest-rate effect, and foreign purchases effects would be depicted as: A) a movement from A to B along aggregate demand curve AD1. B) a movement from B to A along aggregate demand curve AD1. C) a shift of aggregate demand from AD1 to AD2. D) a shift of aggregate demand from AD2 to AD1. 21. Refer to the above diagrams. Assumi ...

• 3 Pages

#### PS2

University of Michigan, ECON 401

Excerpt: ... How much do sellers receive per pound sold, net 1 of the tax? What would happen if the consumers would have to pay the tax? (Use the derivative of p to approximate the change.) Multiple Choice M1) Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n) A) increase in price but a decrease in quantity. B) decrease in price but an increase in quantity. C) increase in both price and quantity. D) decrease in both price and quantity. M2) A drought in the Midwest will raise the price of wheat because of a A) leftward shift in the supply curve. B) rightward shift in the supply curve. C) leftward shift in the demand curve. D) rightward shift in the demand curve. M3) If pizza and tacos are substitutes, a decrease in the price of tacos would lead to a A) decrease in the demand curve for pizza. B) decrease in the quantity demanded of pizza. C) decrease in the price of pizza. D) All of the above. p M4) Suppose the demand function for a good is expressed as Q = 11 4 ...

• 2 Pages

#### Chapter4Summary

ASU, ECN 211

Excerpt: ... irs of changes of the non-price determinants of demand and supply. For example, analyze what will happen to equilibrium price and market quantity if consumers' incomes rise (X being a normal good) and the prices of the resources used to produce X decline. This will produce both an increase in demand (a rightward shift of the demand schedule) and an increase in supply (a rightward shift in the supply schedule). As you graph this out, you will note that an increase in demand combined with an increase in supply MUST cause equilibrium market quantity to rise, but the effect on equilibrium price is theoretically indeterminant (that is, it depends on the magnitudes of the shifts of the demand and supply schedules). You should work through all possible combinations of increases (or decreases) in demand and supply, and in each case reason out the implications for what can and cannot be predicted with certainty about the impact on equilibrium market prices and quantities. 3. You should note that the price system is a ...

• 2 Pages

#### MacroEcon Paper 1

University of West Georgia, ECON 2105

Excerpt: ... rom the Fed's is held at a constant, the plan that Bernanke contrived to reduce in interest rates should increase the demand for money in the average household. This proposal would cause a rightward shift of the demand curve in turn driving prices higher, or in other words, should encourage price increases assuming that all things are held constant and there are no major changes in the plan. This article is extremely pertinent to the material that we are covering in class. Before a human being becomes tremendously ill, side effects and symptoms are shown. We can study our government and economic patterns to determine if something is about to go exceptionally wrong with it. Knowing this information we can foretell what economic downturns will take place in the future. The United States can take action and determine the correct procedures that need to be taken so in turn history does not repeat itself. If the Fed's study economic history we will not put ourselves in such an economic predicament, in which we ...

• 5 Pages

#### macro sample test1 (dont think this is correct)

Mary Washington, ECON 102

Excerpt: ... vidual, its production will not consume scarce resources. d. if people were not so greedy, scarce resources would be able to satisfy the wants of all. 8. Last year, the XYZ Corporation sold 1600 potato peelers at a price of \$6 each, and this year it sold 1950 potato peelers at a price of \$7 each. The best explanation for the change is: a. XYZ suffered a labor strike that drove up costs. b. XYZ received a bad rating from Consumer Reports. c. XYZ just had a successful advertising campaign. d. XYZ made a technological improvement. For the next several questions, consider the effect on the market for cell phones, if the Congress passed an income tax cut. 9. This would cause a. a rightward shift in the demand curve for cell phones. b. a leftward shift in the demand curve for cell phones. c. a rightward shift in the supply curve for cell phones. d. a leftward shift in the supply curve for cell phones. 10. The equilibrium price of cell phones would a. increase b. decrease c. stay the same d. increase or decrease; ...

• 10 Pages

#### Ch3_Class_Demand-Supply

NSUOK, ECON 2213

Textbook: Principles of Microeconomics + DiscoverEcon code card

Excerpt: ... C. Determinants of supply. 1. A change in any of the supply determinants causes a change in supply and a shift in the supply curve. An increase in supply involves a rightward shift , and a decrease in supply involves a leftward shift. 2. Six basic determinants of supply, other than price. 5 a. Resource prices-a rise in resource prices will cause a decrease in supply or leftward shift in supply curve; a decrease in resource prices will cause an increase in supply or rightward shift in the supply curve. b. Technology-a technological improvement means more efficient production and lower costs, so an increase in supply or rightward shift in the curve results. c. Taxes and subsidies-a business tax is treated as a cost, so decreases supply; a subsidy lowers cost of production, so increases supply. d. Prices of related goods-if the price of substitute production good rises, producers might shift production toward the higher-priced good, causing a decrease in supply of the original good. e. Expectations-e ...

• 6 Pages