Economics Intro to Econ + Law of Demand

What is Econ

How humans manage limited resources to satisfy unlimited wants

Economic theories are based on ____ human behaviour but humans are not ___ therefore they do not always hodl true

What are the 4 factors of production

Land, labour, capital and entrepreneurship

What is money?

a medium of exchange

Payments of FOP’s

Rent, wage, interest and profit

Define scarcity

state in which we do not have enough to satisfy all of our wants

Occupational immobility

when there is difficulty moving from one job to another

What is opportunity cost

the loss of potential gain from other alternatives when one alternative is chosen

what if the PPC/PPF

is a graphical representation of the trade-offs between two goods, illustrating opportunity costs and efficiency in production.

Demand

The quantity of goods and services consumers are willing and able to buy at given proces at a given time, ceteris paribus

Law of Demand

Cetreis Parubus, as the price of a good decreases, the quantity demanded increases, and vice versa.

Assumptions LoD

Consumers are rational, competition exists, perfect knowledge, humans are looking to maximize utility.

Normal Good

a good whose demand increases when income increases

Inferior Products

A good whose demand decreases when income increases vise versa

non-price determinants for demand

• Income!! As your income increases, so does _________.

• Advertising!!! 

• Substitute goods-  Good that are very similar.  

• Complement Goods- Goods that need each other! 

• Tastes and Preferences- 

• Expectations- What you hope/ expect or want to happen. 

• Population- in numbers and structure

• Change in Gov policy such as ….

• Confidence

• Seasonal Changes