Supply and Demand

Elastic Demand- measurement of how how consumer's react to change of price 

3 Types of Demand

1. Elastic- the demand the is very sensitive in a change to price. Its always greater, the product is not a need and there are substitute
2. Inelastic- A demand that is not sensitive to a change in price it is a necessity and there are few substitute
3. Unitary- always equal to one

these are examples of the differences between elastic and inelastic Demand

Price Elasticity of Demand (PED)

PED- is a measure used in economics to show the responsiveness, or elasticity of the quantity demanded of a good or service to a change in its price 

above is the equation to find the PED 

Unit 1 Continued...

January 7th, 2016
Chapters 1-2 Production Possibilities Graphs

Above is an example of a PPC A-E being attainable and efficient, F is inside the curve so its attainable but inefficient with underused resources, G is outside the curve which makes it unattainable

Efficiency- using resources in such a way as to max the production of goods and services

underutilization-using few resources than the economy is capable of using

3 types of movements of PPC

1. Inside- this means the resources are underemployed
2. along the PPC means everything is working great !
3. Shifts of PPC- when resources or technology changes

What causes a PPC to shift

• Technological Change
• Change in resources
• Change in labor force
• economic growth
• Natural Disasters/ wars
• more education

Unit 1 Intoduction

January 5th, 2015
Chapters 1-2 Scarcity , factors of Production

      1.Macroeconomics Vs Microeconomics

Macroeconomics-study of economy as a whole, examples are : supply and demand, international trade, minimum wage. Microeconomics- study of individual or specific units of economy, examples are Market structure

    2. Positive Vs Normative economics

Positive- attempts to describe the world as is and very descriptive , collects and presents facts. Normative Attempts to prescribe how the world should be and is opinion based

    3. Needs Vs Wants

Needs- Basic requirements for survival (food, water, shelter, and  clothes). While wants are just the desire of citizens.

 

    4. Goods Vs services

Goods- tangible commodities  meaning it can be bought or produced there are 2 types of goods. Capital Goods- items used in the creation of other. Consumer Goods- goods that are intended for final use by the consumer. Services- work that is performed for someone

Scarcity vs Shortages

Scarcity- is how to satisfy unlimited wants with limited resources this always creates a choice. Shortages Quantity demanded  is greater than quantity supplied.

Factors of Production

1. Natural resources
2. Labor- Workforce
3. Capital 2 types Human capital ( skills, college, training) and Physical Capital (Tools, Machines)
4. Entrepreneurship ( you must be Innovative and a risk taker to make it work )

January 6th, 2015

Chapters 1-2 Scarcity, factors of Productions

1.Tradeoffs -The alternative that we give up when we choose one course of action over another 

2. Opportunity Cost- Is a form of trade offs but the next best alternative

3. Production Possibilities Curve (PPC) Frontier (PPF) Graph (PPG) -Shows alternative  ways to use an economies resources

4  Assumptions of PPG

• Two Goods
• Fixed Resources
•  Fixed Technology
• Full employment of resources

Allocative Efficiency-The products that are being produced are the ones that are being used by society.

Productive Efficiency- products are being produced in the least costly way.