Psycholoy of behaviour Exam Notes.docx

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University of Toronto Scarborough
Economics for Management Studies
Ted Petit

Business Exam Notes1EconomicsNeed vs WantsNeedsnecessary for survivalwants are notOne set of wants can lead to the other oEg want to win the lottery which makes it easier to satisfy other wantsGoods vs ServicesGoods eg Staples sells electronic goodsServices eg food bank provides service to communityProducer vs ConsumerProducers are the business that make goods or provide servicesConsumers are the people who buy the thingsservices that producers supply oEg buying a computer servicing at computerrepairing shopsProducers and consumers operate together to create a marketplace which is any place where they engage in the buying and selling of goodsservicesDemand and SupplyDemand the quantity of goodservice that consumers are willing and able to buy at a particular price oLaw of Demand As price goes up demand goes down Vice versaoInfluences on demand ExpectationsCompetitions priceChange in incomeoIf demand is low supply is high prices go downoIf demand is high supply is low prices go upSupplythe quantity of goodservice that businesses are willingable to provide within a range of prices that people would be willing to pay oLaw of Supply As price goes up supply goes up Vice versaoInfluences on supply Change in number of producers If more competitors enter into the market because it seems good then there will be more supply but the same demand so prices will have to go down to stay competitive so then some companies wont be able to keep up and they opt out of the market and the cycle starts againChanges in price If the price decreases some people may stop producing it because its not making enough of a profitEg if the price of wheat goes down some wheat farmers may switch to farming cornChanges in technology
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