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ECON 1000 Lecture Notes - Lecture 4: Takers, Biasing, Market Clearing

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emeraldwolf159
16 Nov 2016
School
Carleton University
Department
Economics
Course
ECON 1000
Professor
Patrick Coe

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Document Summary

Chapter 4: the market forces of supply and demand. Group of buyers and sellers of a particular good or service. Example: auctions, ice cream market - many sellers, many buyers. Some are very organized, time and place etc . Competitive market has many buyers and sellers. This means actions of each has a negligible effect on price. Assume markets are perfectly competitive, 2 characteristics. 1) all goods are exactly the same. 2) buyer and sellers are price takers. Assumptions work better in some markets than others. Quantity demanded = amount of goods buyers are willing and able to purchase. Higher prices - buyers buy less, lower prices - buyers are able to and want to buy more. Law of demand: other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls the quantity demanded rises. E. g catherine"s demand schedule for ice cream.

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Related Questions

In a perfectly competitive market, all producers sell _________ (perfectly identical/different) goods or services. Additionally, there are ______ (few / many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price _____ (takers/makers).

1. Markets and competition In a perfectly competitive market, all producers sell (perfectly identical/different) goods or services. Additionally, there are (few,many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price (takers,makers)

True or False: The market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

 

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

 

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

 

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve