ECON 1020 Chapter Notes - Chapter 3: Chuck Steak, Shortage, Vise
23 Sep 2016
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Cfo chapter 3: demand, supply, and market equilibrium. Firm- an organization that transforms resources (inputs) into products (outputs). Firms are the primary producing units in a market economy. Most firms exist to make a profit, but some do not. Entrepreneur- a person who organizes, manages, and assumes the risks of a firm, taking a new idea or new product and turning it into a successful business. All households have limited incomes, and all must pay for the goods they consume in one way or another. They are constrained by job availability, wages, personal talents, and accumulated or inherited wealth. Input markets and output markets: the circular flow. Households and firms interact in two basic kinds of markets: Product or output markets- the markets in which goods and services are exchanged. Input or factor markets- the markets in which the resources used to produce goods and services are exchanged.
