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Econ251
Macro economics chpt3
| Question | Answer |
|---|---|
| 4 Market participants | Consumers, Businesses, Gov, inter participants |
| Consumers | Goal:To purchase the most goods that make them happy Cons: Lack of money |
| Businesses | Goal:To make as much money as possible by selling goods and services Cons: scare resources |
| Gov agencies | Goal:to produce desired public goods and services and the redistribution of wealth Cons: Limited resources |
| International participants | To profit to sell and to aquire goods |
| Maximization behaviour | Making profit and welfare maximization explains most market activities |
| Two Market drivers that drives buying and selling | Inability and limitations of resources to produce all we need. |
| Circular flow | Includes 4 market participants |
| 2 markets in the circular flow | Factors market& products market |
| Factor market is? | Where factor of production are exchanged. Land/Labour/Capital/ bought and sold |
| Product market is? | Where consumer buys their stuff this can include gov and international participants |
| Product Market Def. | Anyplace where finished goods are bought and sold |
| Government participants buy from? | the factor market to produce goods and services to the public |
| The consumer is? | The final recipient of all goods and services |
| Opportunity cost | The most desired goods and services that are given up in order to obtain something else |
| Suppliers | Seller providers of goods and services |
| Do business enter the factor market? | Yes they enter the factor market to hire or aquire capital to make products that are supplied to customers |
| Supply Def. | The ability and willingness to sell and produce goods and services at alternative prices( ceteris paribus) |
| Demand Def. | The ability and willingness of customers to buy specific quantitied of goods and services |
| Low prices of goods drives demand T or F? | Answer: True The low price signal drives demand |
| High prices of goods lowers demand T or F? | Answer: True when prices rise deman retracts |
| Demand schedule | A table showing the quantities of good or service a consumer is willing and able to buy |
| Demand curve shows? | The quantities of a good that a consumer is willing and able to purchase at any given price |
| A demand is cure is a positive or negative slope? | A downward slope or a negative slope |
| Law of demand | The amount of goods/services demanded in a given time period that increases as the price fall ( Ceteris Paribus) |
| Determinants of Markets | The willingness of a consumer to buy depending on Taste/income/expectations income/ number of buyers |
| Ceteris Paribus | The assumption of nothing changing ( determinants) |
| Demand movement Vs Shift Demand | A buying shift occurs to the right when a determinant changes regardles of the set price. A movement downwards signals a reduction in supply prices thus increasing demand |
| Market Supply | The total quantities of a good/service that sellers are willing and able sell for at various prices |
| Determinants of supply to make a seller sell set prices | Tech/Factor/Taxes/Expectation/number of seller competition |
| Law of supply | larger quantities of goods and services will be offered for sale at high prices |
| As more supply is needed to fuel demand the price must also go up T or F? | Answer: True |
| Equilibrium | The price at which the quantity of a good in any given time period equals the quantity supplied |
Created by:
brsoul1
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