1. Price changes affect quantity demanded for two reasons: They attractiveness of substitute goods and they alter the real value of the consumers purchasing power. The second effect grows larger as the share of the consumers
Chapter 3 introduces markets and provides an overview of the supply and demand model. It begins by comparing central planning and the market as alternative methods of allocating resources Chapter 3-Supply and Demand: An Introduction Slide 3
1. The equilibrium price of a good is determined by the intersection of its supply and demand curves. We can know everything about a goods cost of production( that, is we can know its supply exactly) yet still not know where the demand curve will intersect the supply curve
Multiple Choice If one person can perform a task in fewer hours than another, you know the person has in performing the task. a. an absolute advantage. b. a comparative advantage. C. both a comparative advantage and an absolute advantage. rd. neither an absolute nor a comparativ advantage
MB MC Overview 1 a Chapter l introduces the concept of scarcity as applied in economics(also the No-Free-Lunch Principle). It presents the unavoidable fact that our needs and wants are unlimited and resources available to satisfy them are limited
