ECON 1 Lecture Notes - Lecture 25: Sole Proprietorship, Inferior Good, Normal Good
Document Summary
Explain the role of the household in an economic system. In market economy, supply resources and demand goods and services from firms. Perform domestic chores that don"t require skills or special resources. Natural monopoly: cheaper for one firm to serve the market than for two or more firms to do so. Nonrival-amount consumed by one person is available for others to consume. Nonexclusive-benefits all in community regardless of who pays for it and who doesn"t. Pursuing full employment, price stability, and economic growth. Occurs because opportunity cost of producing specific goods differs across countries. Merchandise trade balance: value of exported goods value of imported goods. Balance of payments; record of all economic transactions between its residents and residents of the rest of the world. The price of one currency in terms of another. Explain how the law of demand affects market activity.