Lecture Notes for ECON 2006 - Principles of Economics with Marku at Virginia Tech (VT)

Notes Information

Material Type:Class Note 1
Class:ECON 2006 - Principles of Economics
University:Virginia Polytechnic Institute And State University
Term:Spring 2005
  • Discouraged Worker Effect
  • The Economy
  • Economic Contraction
  • Gdp Price Index
  • Income Approach
  • The Law of Supply
  • Law of Supply
  • Discouraged Worker
  • Hyperinflation
  • Expenditure Approach
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Sample Document Text

Supply & Demand Demand -Quantity Demanded: the amount of a certain product a household would buy at a given price -Law of Demand: price and quantity demanded are negatively related -Properties of Demand -negative slope, intersects x-axis and y-axis at (Q,P) -Determinants of Demand -income and wealth -normal goods: when income increases, demand increases -inferior goods: when income increases, demand decreases -price of other goods -compliments: if the price of the compliments increase then demand for the good will decrease -substitutes: if the price of the substitutes increases, then demand for the good will increase -preferences/taste -expectations (prices and income in the future) Supply -Quantity Supplied: amount of a good that firms are willing to produce at a given price -Supply: decision is made by the firms -Law of Supply: price and quantity supplied are positively related -Determinants of Supply -change in cost of production (price of inputs => resources, labor) -when cost increases, supply decreases ...

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