EPF4 Effects of Supply and Demand

Cole Herring

Supply- a stock of resource from which a person or place can be provided with the necessary amount of that resource


Demand- a consumer’s desire and willingness to pay a price for a specific good or service

Effects

When demand increases then supply increases. If products demand increase then in order to keep production up companies must manufacture and thus hire more. If demand decreases then many people are out of jobs.
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Definitions

Human Capital - The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.


How skills impact your pay - The more skilled a worker is, the more valuable they are to a company and the higher their pay will be.


Connection between education and income - The higher an education someone receives the more skilled they are. This results in a higher income.


Salary - A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially to a profession worker.


Wage - A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.


Production - The action of making or manufacturing from components or raw materials, or the process of being manufactured.


Fixed Cost - Fixed costs are expenses that do not change as a function of the activity of a business, within the relevant period.


Variable Cost - Variable costs are expenses that change or vary with the level of output.


Total Cost - Total cost refers to the total expense incurred in reaching a particular level of output.


Derived Demand - A demand for a commodity, service, etc. that is a consequence of the demand for something else.


Income Potential - The theoretical amount of income that is possible from a particular level of output.