Demand and Supply 🦖🦖😭 Flashcards
(25 cards)
An organization that transforms resources (inputs) into products (outputs).
Firm
A person who organizes, manages and assumes the risk of a firm, taking a new idea or new product in turning it into a successful business
Entrepreneur
The consuming units in an economy
Households
This shows the connection between firms and households and input and outputs market
The circular flow of economic activity
This is where the goods and services are exchanged
Output or product market
This is where are the markets in which resources, labor, capital and land—used to produce products are exchange
Input markets
The market in which household supplies work for wages to firms that demand labor
Labor market
This is the market in which household supplies their saving, for interest or for claims to future profits to firms that demand funds to buy capital goods
Capital Market
This is the market in which household supply land or other real property and exchange for rent
The land market
This is the amount (number of units) of a product that a household would buy in a given time period if it could buy all it wanted at the current market price
Quantity demanded
This is a table showing how much of a given product a household will be willing to buy at a different prices
Demand schedule
A graph illustrating how much of a given product a household would be willing to buy at a different price
Demand curve
States that there is a negative or inverse relationship between price and the quantity of the good demanded and its price
This means that demand curve slopes downward
The law of demand
This is the sum of all household wages, salaries, profits, interest, payments, rents and other forms of earnings in a given period of a time. It is a flow of measure
Income
This is the total value of what a household owns minus what it owes. It is a stock measure
Wealth or net worth
These are the goods for which demand goes up when income is higher and forgets demand goes down when income is lower
Normal goods
Are goods for which demand falls and when income rises
Inferior goods
These are the goods that can serve as a replacement for one another; when the price of one increases, the demand for the other goes up.
Perfect substitutes are identical products
Substitutes
These are the goods that “go together”; a decrease in the price of one result in an increase in demand for the other, and vice versa
Compliments
This is the sum of all the quantities of a good or service demanded per period by all the households buying in the market for that could or service
Market demand
This is the demand for a good or service or for a group of a household that make up a market
Individual household
A table showing how much of a product firms will supply at a different prices
Supply schedule
Represents the number of units of a product that a firm will be willing and able to offer for a sale at a particular price during given period
Quantity supplied
States that there is a positive relationship between price and a quantity of a good supply.
Typically means that supply curves have a positive slope.
The law of supply
