Chapter 3Supply and Demand:In Introduction
Chapter 3 Supply and Demand: In Introduction
Basic Economic Ouestions toAnswerWhat: variety and quantityHow: technologyFor whom: distribution
Basic Economic Questions to Answer ◼ What: variety and quantity ◼ How: technology ◼ For whom: distribution
To answer the questions:Economic Systems:- Centrally Planned Economy-FreeMarketEconomy-MixedEconomy
To answer the questions: ◼ Economic Systems: − Centrally Planned Economy − Free Market Economy − Mixed Economy
Market Economythe allocation for resources isdetermined by supply and demandDemand: the buying forceSupply: the selling force
Market Economy ◼ the allocation for resources is determined by supply and demand ◼ Demand: the buying force ◼ Supply: the selling force
Demand: the definitionThe quantity of a good or serviceconsumers' are willing and able to buyat various priceswillingness and ability to buywillingness: need - necessitywant - desireability: purchasing power
Demand: the definition ◼ The quantity of a good or service consumers’ are willing and able to buy at various prices ◼ willingness and ability to buy − willingness: need - necessity − want – desire − ability: purchasing power