BUSS1000 Chapter Notes - Chapter 2: Complementary Good, Money Supply, Opportunity Cost

• School: University of Sydney
• Department: Business Studies
• Course: BUSS1000
• Professor: Steven Hitchcock

Document Summary

Economics: is the study of how a society uses its scarce resources to produce and distribute goods and services. Microeconomics: study of how consumers, businesses and industries collectively determine quantity of goods and services demanded and supplied at different prices. Macroeconomics: study of big picture issues in economy, e. g. competitive behaviour among firms, effect of government policies and resource allocation issues. Entrepreneurship (innovation, initiative and willingness to take on risk) Effect 2- consumers, businesses, governments make trade-offs (giving up something to get something else) Opportunity cost: value of most appealing alternative not chosen. Demand: price up demand down, price down demand up, Shift right increase in demand, shift left decrease in demand. Supply: price up supply up, price down supply down. Shift right increase in supply, shift left decrease in supply. Competition (increase competition leads to decreased supply) Pure competition: many small suppliers selling virtually identical products.