Lecture on the Law of Demand and Supply

Flashcards covering key concepts related to the law of demand and supply and the invisible hand.

What does the 'invisible hand' refer to in economics?

The concept that the law of demand and supply guides economic decisions and benefits society as a whole.

Who is associated with the concept of the 'invisible hand'?

Adam Smith is associated with the concept.

What fundamental principle is illustrated by the law of demand and supply?

The interaction between buyers' demand for goods and sellers' supply of those goods determines prices.

What does the law of demand state?

When the price of a good decreases, the quantity demanded generally increases, and vice versa.

What does the law of supply state?

When the price of a good increases, the quantity supplied generally increases, and vice versa.