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| Study of choices made by economic actors (i.e. individual people, households, companies, and individual markets), small scale economic issues, or specific economic issues (i.e. unemployment in the auto industry) |
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| Looks at the behavior of entire economies such as the unemployment in the U.S. (large scale) |
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| All resources are limited, but people's wants are unlimited --> lack of things people want |
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Definition
Natural (i.e. oil, wind, coal)
Human (i.e. assembly line workers, scientists)
Capital (i.e. department stores, dams, computers)
Entrepreneur (i.e. people who attempt to start a new business) |
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| The type of skilled work force, factories, capital to invest, and a market to sell your goods |
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| When one sacrifices one thing for another (if you use a resource to produce/consume one thing, that resource cannot be used to produce/consume something else) |
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| Value of the thing you are giving up in a trade off |
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| producers increase supply when they can sell a product for more money due to high demand (& vice versa) |
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| Factors which affect supply |
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| Demand for the product, amount of raw materials available for production |
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| wages/salaries, rent, interest on loans, electric bills, raw materials, other goods and services used to manufacture and sell the product |
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| Money left over after a business has paid all of its production costs |
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| A small change in price greatly affects the amount supplied |
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| A small change in price has little impact on the amount supplied |
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| A listing that shows quantity supplied at various prices |
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| All of the product(s) a company makes in a given period of time |
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| The total income that a business receives from selling its products |
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| An inverse relationship between a product's price and the quantity demanded |
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| When price increases, people will not be able to afford as much --> demand decreases due to price increase |
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| When people substitute similar, lower priced items for the desired item (Leland brand if Tae brand is too expensive) |
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| Diminishing marginal utility |
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Definition
| as more of a product is consumed, the satisfaction gained decreases |
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Definition
| A small change in price greatly affects the quantity demanded |
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| A small change in price has only a slight effect on the quantity demanded |
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| When a product's demand shifts, different quantities of a product are demanded at each price |
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| Consumer tastes and preferences |
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Definition
| If they like it, they demand it. If they don't, they don't demand it. |
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| Goods that are similar to or complement certain goods can be affected by demand shifts |
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| Used to replace the purchase of similar goods when prices increase |
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| Commonly used with other goods |
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| Increases in demand/supply shift |
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| Decreases in demand/supply shift |
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| When supply and demand in the market are equal |
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| The price at the point where supply and demand are equal |
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| A lack of products demanded |
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| An overabundance of supply caused by overproduction or low demand |
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