Module 2: Fundamental Concepts and Demand

Question 1

what does microeconomics study?

Answer 1

it studies the economy at the small-scale level, examining individuals and specific markets.

Question 2

what does macroeconomics study?

Answer 2

the economy at the large-scale level, examining total output, the price level, and other aggreate (totatl) measures of the economy.

Question 3

what are the 4 categories for resources?

Answer 3

land: natural resources
labor: human effort both physical and mental
capital: tools, machinery, infrastructure and knowledge
entrepreneurial ability: the talent to assume risk and combine the land, labor, and capital into a productive proces.

Question 4

what is relative scarcity?

Answer 4

used to describe the scarcity of one item relative to another

Question 5

demand curve

Answer 5

a graphical representation of the relationship between the price of a good, service, or resource and the quantitates consumers are willing and able to buy over a fixed time period, all else held constant.

Question 6

law of demand

Answer 6

tells you that people will be more willing and able to buy a cup of lemonade and quantity demanded will increase

Question 7

the market demand

Answer 7

the overall, or total demand for a good service, or resource. it represents the horizontal summation of the quantities demanded by individuals, firms, states or even nations at each price over a fixed time period, all else held constant

Question 8

changes in demand

Answer 8

a change in the quantity of a good, service, or resource demanded at every price. graphically an increase in demand is represented by a rightward shift of the demand curve, while a decrease in demand is represented by a leftward shift of the demand curve

Question 9

determinants of demand

Answer 9

income, tastes and preferences, number of buyers, and expectations