Economics 1021A/B Chapter 3: Chapter 3 Notes.docx

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Kul Bhatia

Document Summary

Competitive market: a market that has many buyers and many sellers no single buyer or seller can influence the price: money price: number of dollars that must be given up in exchange for an object, relative price: the ratio between what is chosen and its opportunity cost is an opportunity, price index: dividing the money price of a good by the money price of a basket of all cost goods. Normal good demand increases as income increases, inferior good demand decreases as income increases: expected future income and credit: expected future income increases or credit becomes easier to get (cid:224) demand for the good increases now, population: size and age structure of population, larger population = larger demand for all goods, preferences: value people place on each good/service, demand increases: curve shifts rightward quantity demanded at each price is greater.