6 market economy
Post on 15-Nov-2014
1.069 Views
Preview:
DESCRIPTION
TRANSCRIPT
Normal Goods vs. InferiorGoods
• As incomeincreases,consumptionincreases.
• As incomeincreases,consumptiondecreases.
Is it fair for those of us who livecomfortably to impose ourpreferences on individuals in thedeveloping world?
Utility
• People act to increase their utility atall times.
• Why is this not the same as beingselfish?
Prices Transmit Information
• How do prices transmit information?• What happens when demand goes up
for a product? What does that tellthe producer?
• What happens to the prices oforanges in Ohio when a hurricanehits Florida? Why?
• What happens to the price of lumberand other construction equipment inFlorida during an active hurricaneseason?
top related