ECO100Y5 Study Guide - Final Guide: Excess Supply, Shortage, Butters Stotch
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ECO100Y5 Full Course Notes
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Objectives for an economy equity fair efficiency scarcity of resources full employment growth gdp, gdp/capita stability inflation, exchange rate, balance of trade. Command based system central authority determines what gets produced, quantity, price, where labourers work no competition not efficient. Mix system government intervention is beyond the market system. Assumptions only two goods are produced: guns and butter fixed resources/inputs/capital/technology efficient. Partial equilibrium analysis (single market): supply and demand. Demand for good x: px q. 0: household income q d x. 0< (inferior good: py, pz price of other goods q. Aggregate market demand for good x: shifting of the demand schedule, household income, prices of other goods, tastes/peferences, expectation. Supply for good x: px q. 0: technology more efficient, py, price of other goods, number of suppliers. Aggregate market supply for good x: shifting of the supply, cost of inputs, technological advancements, price of substitutes and complements, number of suppliers q1 q.
