lecture 2 Flashcards
(14 cards)
what is a firm?
an organisation that transforms resources into products, firms are the primarily producing units in a market economy
what is an entrepreneur?
a person who organises, manages and assumes the risk of a firm,
What is demand?
The amount of a good consumers are willing and able to buy per period of time
What is quantity demanded?
The amount of a product that a household would buy in a given period if it could buy all it wanted at the current market price
What is an inferior good?
A good that consumers demand MORE of as their income decreases
What is a normal good?
A good that consumers demand MORE of when their income INCREASES
What is the market demand?
The suns of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service
What is profit?
The difference between revenues and costs
What is the quantity supplied?
The amount of a particular product that a firm would be willing and able to offer for sale at a particular price during a given time period
What is a supply schedule?
Shows how much of a product firms will sell at alternative prices
What is the law of supply?
The positive relationship between price and quantity of a good supplied
What is a supple curve?
A graph illustrating how much of a product a firm will sell at different prices
What is the market supply?
The sun id all that is supplied each period by all producers of a single product
What happens at the equilibrium price?
The market clears
