[ECON 100A] - Final Exam Guide - Everything you need to know! (101 pages long)
Document Summary
Chapter 2: the basics of supply and demand. Supply curve: shows quantity of good that producers willing to sell at given price. The higher the price, the more that firms are able and willing to produce and sell. Demand curve: shows how much of good consumers willing to buy as price per unit changes. Substitutes: two goods which a increase in the price of one leads to an increase in qd of the other. Complements: two goods for which an increase in the price of one leads to a decrease in the qd of the other. Equilibrium: price that equates the qs to qd. Market mechanism: tendency in a free market for price to change until the market clears. Surplus: situation in which the qs > qd. Competitive: both sellers and buyers should have little market power. Little ability individually to affect the market price. S and d curves used to trace effects of shifts.
