BUS-101 Chapter Notes - Chapter 4: Interbank Foreign Exchange Market, Market Basket, Exchange Rate
Document Summary
Almost all goods and services are scarce because there are too few of them to satisfy the wants of all individuals. Factors of production: land, labor, capital, and entrepreneurial ability. Theory of demand: if a good"s price increases, a buyer will buy fewer, demand curve shows this-why it is slanted down, quantity demanded depends on factors other than just the price. Normal good: as income increase so does purchase of these bmw. Inferior good: as income increase, purchase of these decreases. Tastes and preferences: satisfaction, enjoyment, pleasure, etc. Expectations for the future: product is going to run out, buys more. Shifts of the demand curve: curve only moves when there"s a change in one of the independent variables. If price of a compliment increases, demand decreases (shift to the left) Theory of supply: if a good"s price increases, businesses will supply more, supply curve shows this-why it is slanted up, quantity supplied depends on numerous independent variables.
