Test 6 Flashcards
1 aspect of voluntary exchange
sellers can sell to whomever
the act of buyers and sellers freely and willingly exchanging in transactions voluntarily
voluntary exchange
what is specialization
focusing on 1 specific area = efficiency
the mutual dependence upon each other to provide for the goods and services we consume
economic interdependence
what is demand
the desire, ability, and willingness, to buy a product
the list of various quantities demanded at all prices
demand schedule
what relationship does the law of demand state that the quantity demanded of a good/service has with its price?
inverse
what is supply
the amount of a product that would be offered at all possible prices
what is the list of various quantities of a particular product at all prices
supply schedule
what relationship does the law of supply state that price and quantity have?
direct
what is the point where supply and demand intersect?
equilibrium
why do businesses specialize?
specialization allows a business to focus on one area. this makes it more efficient.
why do we value economic interdependence?
we rely on each other for the goods and services we need. this makes the economy grow.
who do you think equilibrium is important?
equilibrium is where efficiency occurs. it keeps the economy in balance.
