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Chapter 3 Individual Markets Supply and Demand
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Chapter 3Individual MarketsSupply and Demand
Chapter 2 Table 2.1
Chapter 2 Figure 2.1
Chapter 2 Figure 2.3
Chapter 2 Table 2.2
Chapter 2 Figure 2.4
Chapter 2 Figure 2.5(a)
Chapter 2 Figure 2.5(b)
Chapter 3 Table 3.1
Chapter 3 Figure 3.1
The Law of Demand:Why is the Demand Curve Downward-sloping? The Income Effect
as the price rises given your income you can only afford to buy less as the price falls given your income you can afford to buy more
The Substitution Effect As the price rises, buyers switch to relatively cheaper goods As the price falls, buyers switch away from other, relatively
more expensive goods
Chapter 3 Table 3.2
Chapter 3 Figure 3.2
Determinants of Demand (5) Tastes & Preferences Consumer Income
Normal v. Inferior Goods Number of Consumers Consumer Expectations (of future price changes or
availability) Prices of Related Goods & Services
Substitutes Complements
Mnemonic: TINER
Chapter 3 Figure 3.3
Chapter 3 Table 3.3
Chapter 3 Table 3.4
Chapter 3 Table 3.5
Chapter 3 Figure 3.4
The Law of Supply:Why is the Supply Curve Upward-sloping? Marginal costs of production rise as more is
produced When producers make more output, they need
more inputs Land Labor Capital Entrepreneurship
Producers bid up the price of these inputs by using more
and must pass on the higher cost to consumers
Chapter 3 Table 3.6
Determinants of Supply (6)
Production Technology Input Prices (Factor or Resource Prices) Number of Suppliers Taxes and/or Subsidies Producer Expectations Prices of Related Goods & Services
Substitutes in Production/Switching Outputs Complements in Production/Byproducts
Mnemonic: TINTER
Chapter 3 Table 3.7
Chapter 3 Table 3.8
Chapter 3 Figure 3.5
Chapter 3 Figure 3.6
Chapter 3 Table 3.9
Chapter 3 Figure 3.7
A Price Ceiling
Chapter 3 Figure 3.8
A Price Floor
Supply and Demand Determinants:RelationshipsDeterminants of
Demand Tastes and
Preferences Income Number of Consumers Consumer
Expectations Prices of Related
Goods and Services
Determinants of Supply Technology Input Costs Number of Producers Producer
Expectations Prices of Related
Goods and Services Taxes & Subsidies
