Economics 1022A/B Lecture Notes - Lecture 11: Demand Curve, Inferior Good, Marginal Cost

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Bruce Hammond

Document Summary

Market: an arrangement that enables buyers and sellers to get information to do business with each other. Competitive market: a market that has many buyers and many sellers, so no single buyer or seller can influence the price. Money price: refers to the number of dollars that must be given up in exchange for a good/service. Relative price: the ratio of one price to another. Represented in terms of basket of goods. Money price of a good/ money price of basket (price index) = relative price. Opportunity cost of how much of the basket you must give up. When relative price drops meaning price drop relative to the average price of other goods. If you demand something, then you: want it, can afford it, plan to buy it. Wants: are the unlimited desires or wishes that people have for goods and services. Quantity demanded: the amount that consumers plan to buy during a given time period at a particular price.