Equilibrium
Define equilibrium.
The point at which quantity demanded and quantity supplied come together.
What is a trade-off?
Trade-offs are the allternative that is available when making a decison.
What does every choice come with?
A consequence.
Define supply.
How business owners adapt to meet changes in price.
What is the law of Demand?
When the price goes up, Demand goes down and when the price goes down, Demand goes up.
Define disequillibrium.
If the market price or quanity supplied is anywhere but at equilibrium.
What is opportunity cost?
The cost of the next best alternative use of money, time, or resources when one choice is made rather than the other.
Define scarcity.
Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited.
Define profit.
The difference between the cost to produce a good or service and the amount it is sold for.
What is elasticity of Demand?
How much demand changes with a change in price.
Interactions between buyers a sellers will...
Always push the market back towards disequilibrium.
How are trade-offs and opportunity costs related.
A trade-off is the choice that you have to make between two options, and the opportunity cost os what you loose based off of that decision.
Define economics.
Economics is the study of the choices we make.
What is an inelasticity of Demand?
When Demand changes very little with a change in price.
How do changes in supply affect demand?
Excess supply leads to a surplus, this will create a decrease in price and an increase in demand.
A decrese in supply leads to a increase in price and a decrese in demand.
What are you weighing when making a decision?
Cost and benefit.
What is an entrepreneur?
An entrepreneur is a person who puts together land, labor, and capital to make new businesses.
When is a demand curve accurate?
When there is only a change in price.
Why are prices so important?
Price is a language both producers and consumers can use to determine value.
What is one common trade-off people face in their every day lives?
Income vs. Leisure.
How much money one makes compared to spending money on things that arent a 'necesity'.
List the factors of production.
Land, Labor, and Capital.
What are 4 non-price factors that affect Demand?
Change in Income, Substitution Effect, Complimentary Products, and Changes in Attitude.