Lecture 1
Def. Economics. Def. De nition. Income
1) resources (res): Ec. Economics
Producers Consumers
- labor Cost Pro t Value
- real capital Suppliers Demand
- raw materials, land Market
- environment
2) scarcity: we don’t have enough resources
to satisfy everyone’s needs, that’s why we need to
Other markets Government
choose World
market ec. m Planned ec
Prices are the most important piece of into
Mixed
Incentives: the price give incentives to produces and consumers
if u don’t care about the environment in the
planned ec, u wi have problems*
3) reality -> hypothesis -> model -> test
if the model is not good, you are back to reality
Basis about market
Market ec - prices and quantity decided by market - meeting a point between P
consumers and producers
2 Demand curve
Consumers: demand (D) how consumers are thinking about a certain precept
Demand
Consumers, tastes , utility and maximatization 3
Decided by... Price of products = prices goes down when quantity (Q) goes up
Decided by … price of other products = Px goes up = Qy goes up (substitute)
= Px goes up. = Qy goes down (complementary) Q2 Q1 Q0 Q
CRITERIUS PARIBUS (CP) = everything else is constant
What happens when other factors ( not price) change?
Choose: an income, a normal product
If income increases also does demand
If prices are going down, to a higher income, the demand is som's to
P
increase = shift in the whole curve to the right
General:
• if demand increase= shift to the right
P • If demand decrease = shift to the left
pDs
Quantity demanded= movement in the D curve
Q Q1 Q Demand = shift of a D curve
fi
fi
Def. Economics. Def. De nition. Income
1) resources (res): Ec. Economics
Producers Consumers
- labor Cost Pro t Value
- real capital Suppliers Demand
- raw materials, land Market
- environment
2) scarcity: we don’t have enough resources
to satisfy everyone’s needs, that’s why we need to
Other markets Government
choose World
market ec. m Planned ec
Prices are the most important piece of into
Mixed
Incentives: the price give incentives to produces and consumers
if u don’t care about the environment in the
planned ec, u wi have problems*
3) reality -> hypothesis -> model -> test
if the model is not good, you are back to reality
Basis about market
Market ec - prices and quantity decided by market - meeting a point between P
consumers and producers
2 Demand curve
Consumers: demand (D) how consumers are thinking about a certain precept
Demand
Consumers, tastes , utility and maximatization 3
Decided by... Price of products = prices goes down when quantity (Q) goes up
Decided by … price of other products = Px goes up = Qy goes up (substitute)
= Px goes up. = Qy goes down (complementary) Q2 Q1 Q0 Q
CRITERIUS PARIBUS (CP) = everything else is constant
What happens when other factors ( not price) change?
Choose: an income, a normal product
If income increases also does demand
If prices are going down, to a higher income, the demand is som's to
P
increase = shift in the whole curve to the right
General:
• if demand increase= shift to the right
P • If demand decrease = shift to the left
pDs
Quantity demanded= movement in the D curve
Q Q1 Q Demand = shift of a D curve
fi
fi
