Unit 1-4 Basic Concepts
goods produced and used to make other goods and services. Basic categories of capital resources include tools, equipment, buildings, and machinery.
land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all geographical locations, mineral deposits
productive activity, especially for the sake of economic gain. the body of persons engaged in such activity, especially those working for wages.
- entrepreneurship is the development of a business from the ground up — coming up with an idea and turning it into a profitable business.
- inventive and risk taking spirit. This is a rather new addition to a traditional list.
wants vs needs
Wants are goods or services that are not necessary but that we desire or wish for. some examples of wants are: designer clothes, nice cars, and the newest technology.
Needs would be defined as goods or services that are required. This would include the needs for food, clothing, shelter and health care. some examples of needs are: food, shelter, and water.
a balance achieved between two desirable but incompatible features; a compromise.
- Law of demand- holding all else equal, when the price of a good rises, consumers decrease their quantity demanded for that good.
- Law of supply-holding all else equal, when price of a good rises, supplies increase their quantity supplied for that good.
Supply and Demand
Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price.
Determinants of Demand
- consumer income
- the price of a substitute good such such as a Popsicle
- consumer tastes and preferences for lemonade.
Determinants of supply
- The cost of an input to the production of lemonade
- technology and productivity used to produce lemonade
- taxes or subsidies on lemonade
What does an increase in demand do to equilibrium price and quantity?
B. in crease them
C. no change
D. increase in equilibrium price and decrease in quantity
E. decrease in equilibrium price and increase in quantity
What is the want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services)?
Which of the following are examples of capitol?
II. A barrel of crude oil
III. A registered nurse
IV. A share of corporate stock
(A) I only
(B) II only
(C) III only
(D) II and IV only
(E) I and IV only