1) The document presents a simple market model that includes demand, supply, and equilibrium. 2) Demand is influenced by lower prices, higher income, tastes, and related goods prices. Supply is influenced by higher prices, lower input prices, and technology. 3) Demand and supply are shown graphically and through equations, where the intercepts and slopes provide information about quantity and price changes. Equilibrium is reached where the demand and supply curves intersect.

1. Micro review:The simple market model juliohuato@gmail.com

2. Micro review A simple market model Demand Supply Equilibrium Shifts in demand or supply Algebra and graphs

3. Demand What makes buyers buy (consumers consume) more of a good? A lower price of the good Higher income or wealth Enhanced taste for the good Suitable changes in prices of related goods Expectations Etc.

4. Demand graph

5. Demand equation where 40 is the (only in this case, because the axes of this graph are flipped) horizontal intercept and -2 is the slope. NOTE: The intercept tells you the quantity demanded when the good is free. That is, when p=0, Qd = 40. In most cases, this is not of much interest. The slope (-2) tells you the change in the quantity demanded when the price changes in one unit ($1/unit). That is, when Dp = 1, DQd = -2.

6. Supply What makes sellers sell (producers produce) more of a good? A higher price of the good Lower input prices (e.g. wages) Improved technology Expectations Etc.

7. Supply graph

8. Supply equation where 10 is the (again, only in this case) horizontal intercept and 4 is the slope. What do the intercept and slope tell you?

9. Equilibrium graph

10. Solving the system

11. Solving the system