200425 Lecture Notes - Lecture 6: Opportunity Cost

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amberhippopotamus661

30 Mar 2019

School

UWS

Department

University of Western Sydney

Course

200425

Professor

anonymous

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Document Summary

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand. The relationship between demand and supply underlie the forces behind the allocation of resources. In market economy theories, demand and supply theory will allocate resources in the most efficient way possible.

Related Questions

Which of the following defines a demand curve?

a. The law of demand represents a state in which the conflicting forces of supply and demand are in balance.
b. The law of demand represents those resources that go into the production of any given product.
c. A principle that states there is a direct relationship between the price of a good and the quantity of it producers are willing to supply.

d. A principle that states there is an inverse relationship between the price of a good and the quantity of it buyers are willing to purchase.

beigetortoise256

Any point along the market demand curve shows

1. the quantity of the good that firms would be willing and able to supply at a specific price

2. the relationship between the price of the good and total quantity demanded at a series of prices

3. the opportunity cost of supplying a given quantity of goods to the market

4. the quantity of the good that consumers would be willing and able to purchase at a specific price

5. how population changes affect the quantity demanded at a specific price

purplewhale646

Which of the following statements is true about the supply?

a. Supply refers to the amount of inventory that sellers have in their warehouses.

b. There is an inverse relationship between price and quantity supplied.

c. As price increases, producers are willing and able to put more of the good on the market for sale.

d. As price decreases, producers are willing and able to put more of the good on the market for sale.

crimsonalligator541

200425 Lecture Notes - Lecture 6: Opportunity Cost

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