Create an account
the study of how people seek to satisfy their needs and wants by making choices (in a world of scarcity)
When consumers want more of a good or service than producers are willing to make abailable at a particular price.
Marginal (thinking at the margin)
The process of deciding whether to do or use one additional unit of some resource
the study of economic behavior and decision making in small units, such as households and firm
Free Market Economy
an economic system in which decisions on the three key economic uestions are based on voluntary exchange in markets
an economic system that rellies on habit, custom, or ritual to decide the three key economics questions
Centrally Planned Economy
An economic system in which the government makes all decision on the three key economic questions
Pillars of Free Enterprise
private property, specialization, voluntary exchange, the price system, market competition, entrepreneurship
Law of Demand
Consumers will buy more of a good when its price is lower and less when its price is higher
Future Price Expectation, Income, Population, Price of other goods (substitutes and compliments), taste and preferences
What are the factors that shift the demand curve? (answer is in alphabetical order)
Cost of inputs, government, number of suppliers, price expectations, and technology
What are the factors that shift the supply curve? (answer is in alphabetical order)
Market Clearing Price/ equalibrium
the price at which the amount supplied is equal to the amount demanded
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