Chapter two notes, part one

StudyBlue printing of Chapter two notes, part one html, body, div, span, applet, object, iframe, h1, h2, h3, h4, h5, h6, p, blockquote, pre, a, abbr, acronym, address, big, cite, code, del, dfn, em, font, img, ins, kbd, q, s, samp, small, strike, strong, sub, sup, tt, var, b, u, i, center, fieldset, form, label, legend, table, caption, tbody, tfoot, thead, tr, th, td { margin: 0; padding: 0; border: 0; outline: 0; font-size: 100%; background: transparent; } body { line-height: 1; } blockquote, q { quotes: none; } blockquote:before, blockquote:after, q:before, q:after { content: ''; content: none; } /* remember to define focus styles! */ :focus { outline: 0; } /* remember to highlight inserts somehow! */ ins { text-decoration: none; } del { text-decoration: line-through; } /* tables still need 'cellspacing="0"' in the markup */ table { border-collapse: collapse; border-spacing: 0; } /* end RESET */ .header { min-width:800px; } .logo { padding:6px 20px 2px 20px; margin:0; font-size:25px; 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-moz-border-radius: 5px; -webkit-border-radius: 5px; } .print-button a:hover { background-color:black; } .theNote .content { width: 8.0in !important; margin: 5px auto; padding:20px; background-color:white; } .theNote .header { border-bottom: 1px dashed #C8C8C8; font-size: 17px; padding: 0 0 10px; line-height: 19px; color: #00ADE1; min-width:500px; } .theNote .body { font-size: 14px; line-height: 19px; padding: 10px 0; } .theNote{ padding:6px 0; clear:both; background-color: rgb(200,200,200); } .theNote h3{ color: rgb(100,100,100); } .theNote h1, .theNote h3{ background-color:white; padding:2px 20px; width:8.0in !important; margin: 0 auto; font-size: 15px; } .theNote h1{ padding-top: 10px; font-size: 15px; } .theNote h1:first-child{ font-size: 20px; } .theNote h3 { font-size: 14px; font-weight: normal; } #options { border: 3px double #ccc; padding: 5px 12px; margin: 10px 50px 10px 20px; float: left; } #info { border-top: 1px solid #ccc; padding-top: 5px; font-style: italic; } li { margin: 5px 10px 5px 25px; } ul li { list-style: disc; } ol li { list-style: decimal; } img { border: 0; } table { clear: both; width: 100%; border: 1px solid #c5c5c5; border-width: 1px 0; margin: 0; page-break-after: always; } table#page { page-break-after: auto; } td { text-align: center; font-size: 12px; border-bottom: 1px dashed #c5c5c5; height: 1.75in; width: 50%; padding-left: 15px; } .leftside { border-right: 1px solid #cccccc; padding: 0 15px 0 0; } .bottom td { border-bottom: none; } .clearfix { clear:both; line-height:1px; height:1px; } img { max-width:80%; max-height:150px; margin:20px; } @media print {.header { display: none; } .content .header{ display:inherit; } table { border: 1px dashed #bbb; border-width: 1px 0; } .theNote{ background-color:white; } } Section One- Six markets exist whenever there is at least one person who wants to buy a product and one person who wants to sell the product The Law of Demand is that there is an inverse relationship between the price of a product and the amount of the product consumers are willing and able to purchase ceteris paribus means everything else held constant, ie ignoring any other factor besides price and quantity the income effect is when the price of a product that you buy increases, and although your income remains constant, you have less money and therefore feel like you are poorer the substitution effect is when the price of a brand of a product increases, you change your purchases to another, cheaper brand the demand for a product is the relationship between the price of the product and the quantity of the product that is demanded by consumers total revenue earned = price charged x quantity sold change in quantity demanded is DIFFERENT from a change in demand change in QUANTITY DEMANDED = sliding up and down on the same demand curve change in DEMAND = having to create a whole new demand curve, to account for a change in circumstances outside of price or quantity demand change; ie weather, oil spill, job loss at low prices, the quantity supplied is also low suppliers wouldn't want to sell their products at a low price, so they'll put less for sale at high prices, the quantity supplied is high suppliers see the high price of their product on the market, and want to take advantage, so they put as much of their product out as they can, while they can sell for high price there is a positive relationship between price and quantity supplied change in quantity supplied is DIFFERENT from a change in supply change in QUANTITY SUPPLIED = sliding up and down on the same supply curve change in SUPPLY = having to create a whole new supply curve, to account for a change in circumstances outside of price or quantity supply change; ie regulations, change in foreign market price how a market works: buyers and sellers negotiate to determine the price of a product excess supply = surplus quantity supplied - quantity demanded = amount of surplus market surplus acts as a signal to suppliers to lower the price of the product the market equilibrium price is the one price that exists in a market so that the quantity demanded is exactly equal to the quantity supplied excess demand = shortage quantity demanded - quantity supplied = amount of shortage it does not matter where the price of a product is set initially, in the free market, uncoordinated negotiation between buyers and sellers will always end up at market equilibrium if the amount of a product demanded changes regardless of the price asked, the demand changes NOT the quantity demanded an increase in demand is always represented as a shift to the right of the demand curve higher equilibrium price and quantity a decrease in demand is always represented as a shift to the left of the demand curve lower equilibrium price and quantity if the amount sellers are less willing and able to supply their product, regardless of the price of their product on the market, the supply has changed NOT the quantity supplied an increase in supply is always represented as a shift to the right of the supply curve lower equilibrium price and quantity a decrease in supply is always represented as a shift to the left of the supply curve higher equilibrium price and quantity