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ECN 143:Notes:Day 4
ECN 143:Notes:Day 4
32
Business
Undergraduate 1
01/25/2016

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Term
What is a nickname for Determinants of Demand?
Definition
Demand Shifters
Term
What is a Determinant of Demand?
Definition
Variables held constant when a demand curve is drawn.
Term
What is Change in Demand?
Definition
When demand changes regardless of change in price at any price.
Term
What are examples of a consumer tastes or preferences?
Definition
1.) Health and Exercise Active Lifestyles
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2.) Fear of Accidents
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3.) Fear of Disease
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4.) Changing of Fashion
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5.) Fear of the Good
Term
The number of buyers is directly related to what?
Definition
Demand
Term
What are examples of changes in the number of buyers?
Definition
1.) Population Changes
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2.) Communications Improvements
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3.) Status of International Markets
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4.) Life Expectancies
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Term
What is a Normal Good or Superior Good?
Definition
A good whose demand varies directly with consumer income.
Term
What is an Inferior Good?
Definition
A good who's demand is inversely related to consumer income.
Term
What are examples of Inferior Goods?
Definition
1.) Used Clothing
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2.) Re-tread Tires
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3.) Bus Tickets
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4.) Fast Food
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Term
How can goods be related?
Definition
As either Substitutes or Complements
Term
What are Examples of Substitute Goods?
Definition
1.) Apples and Bananas
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2.) Cinema Films and Bluray Disks
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3.) Coke and Pepsi
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Term
What are Examples of Complementary Goods?
Definition
1.) Milk and Cereal
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2.) Coffee and Cream
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3.) Coffee and Donuts
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4.) Coffee and Sugar
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5.) Film and Cameras
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Term
What are examples of Demand Shifters?
Definition
1.) Consumer Tastes and Preferences
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2.) Consumer Expectations about Price
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3.) Number of Buyers
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4.) Consumer Income
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5.) Prices of Related Goods
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Term
What if the current price equals the expected future price?
Definition
We wouldn't expect any change in demand based on consumer expectation of price.
Term
What if the current price is greater than the expected future price?
Definition
We would expect an increase in current demand based on consumer expectation of price.
Term
What if the current price is less than the expected future price?
Definition
We would expect a decrease in current demand based on consumer expectation of price.
Term
What is an Early Adopter?
Definition
A person who starts using a product or technology as soon as it becomes available.
Term
Is there a relationship between a lack in consumer expectation of future price and current demand?
Definition
No, there is not.
Term
What is Supply?
Definition
A schedule or function showing the various amounts of a product that producers are willing to produce and make available for sale at various prices per unit of time.
Term
What is the law of supply?
Definition
There exists a direct relationship between price and quantity supplied.
Term
Producers produce less products if what happens to the price?
Definition
It decreases
Term
Producers produce more products if what happens to the price?
Definition
It increases
Term
What is Economic Profit?
Definition
A firm's total revenue minus a firm's total costs.
Term
What is a symbol for economic profit?
Definition
The Pi Symbol
Term
What is Total Revenue?
Definition
Price*Quantity
Term
What are Normal Profit?
Definition
Factor payment to an entrepreneur, which is one of many costs of production.
Term
What happens when consumers offer a higher price to producers?
Definition
It increases their total revenue, which in turn increases the producer's economic profit.
Term
Producers are fundamentally what?
Definition
Those who maximize profits
Term
What happens when a producer's economic profit is increased?
Definition
It gives the producer a greater incentive to produce.
Term
What are Capacity Constraints (Short Run Production)?
Definition
When Marginal costs of labor increases as productivity decreases due to the large demand forcing the producer to hire more labors with a scarcity of capital.
Term
How does a producer recover a rising marginal cost and declining marginal productivity that is associated with Capacity Constraints (Short Run Production)?
Definition
The consumer must receive higher prices for their product for increased output.
Term
What are two Theoretical Justifications of the Law of Supply?
Definition
1.) Producers are those who maximize economic profit.
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2.) Capacity Constraints (Short Run Production)
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