Basic Economic problem Flashcards
What are the 3 Economic Problems
Unlimited Need and Wants
Limited Resources
Problem of Scarcity
What are the 4 Economic Agents
Producers
Consumers
Government
Workers
What are the 4 Economic Agents objectives
Producers- Try to maximise profit
Consumers- Try to maximise satisfaction
Government- Try to maximise social welfare
Workers- Try to maximise benefits of work
What does the Law of Diminishing Marginal Utility
The more of a product or service is consumed, the amount of satisfaction gained diminishes
What is Total Utility
The total satisfaction from a given level of consumption
What is Marginal Utility
The change in satisfaction from consuming an extra unit
When Demand goes up
The Demand Curve shifts right (Foward)
When Demand goes down
The Demand Curve shifts left
(Backwards)
When Supply goes up
The Supply Curve shift left (upwards)
When Supply goes down
The Supply Curve shifts left (up-wards)
What are some of the factors that influence Demand
Trends, influence and price
What are some of the factors that influence the Supply curve
Wages,raw materials, cost of production, taxes, subsidies, Government, Technology, Natural factors (Food,Droughts)
What is PED
The responsiveness of a goods quantity demanded to a change in price
What is PES
The responsiveness of a goods quantity supplied to a change in price
Formula for PES
(% Change in Quantity Supplied) / (% Change in Price).
