Chapter 1 - Value
Limited Quantity Available
What is Scarcity?
Land, Labor, Capital, Entrepreneurship
What are the factors of production?
It is not just peoples desire to buy something, it is their actual follow through to purchase the item
What is Demand?
The amount of goods and services that business firms are willing and able to provide at different prices
What is supply?
A physical item a business firm is willing to provide?
What is a good?
Unlimited Desires of a Human Being
What is insatiability?
The Effect of Government borrowing
What is crowding out?
Lower the Price the Higher the Demand, Higher the Price the lower the demand
What is the law of demand?
The higher the price consumers are willing to pay, the greater quantity of product the business firms will produce.
The lower the price consumers are willing to pay, the lesser quantity of product the business firms will produce
What is the law of Supply?
A non physical offer to supply something that someone else needs supplied by individuals or business firms
What is a service?
Goods that have a negative economic value
What are nuisance goods?
Designed to explain how a complete national economic system functions
What is the circular flow model?
Prices transmit information, provide incentives & redistribute income
What are the functions of prices?
The price at which consumers will take the exact quantity the market supplies
What is the Market Equilibrium Point?
Changes in income and changes in the price of related goods are examples of these...
What are factors that shift demand?
Goods and services that do not have an economic cost
What are free goods?
Allows the observer to see the maximum feasible amounts of two commodities that a business can produce when both are competing for the businesses limited resources.
What is the Production Possibilities Curve?
Goods that a household may use in place of other goods
What are substitute goods?
When their is excess supply of products or services that the market is not willing to buy at a certain price
What is a surplus?
Goods that experience and increase in demand when consumers experience an increase in income
What are normal goods?
Choices that are made by individuals
What is microeconomics?
Institutions that receive deposits of excess money from households and loan it to businesses.
What are financial Markets?
What is the principle of diminishing marginal utility?
This is caused when various factors hold the price below the market Equilibrium Point.
What is a shortage?
Changes in technology and changes in production are examples of these...
What are factors that change supply?