The Principles of Our Market Economy Ch 14
- Slides: 11
The Principles of Our Market Economy Ch. 14 Sec. 1 Pp. 374 -381
The Circular Flow of Economic Activity: Expanding the Circular Flow • Rent – payment for the use of land • Wages – payment for the use of labor • Interest – payment for the use of capital.
Supply and Demand • Buyers and sellers exchange goods and services through a market • Markets determine price • Producers compete with each other to sell goods and services to consumers
Law of Demand • Demand – the amount of a product or service that buyers are willing and able to buy at different prices • At lower prices, people demand more • At higher prices, people demand less
Law of Supply • Supply – the amount of a product that producers are willing and able to offer at different prices • At high prices, more producers are willing to supply the product • At lower prices, less producers are willing to supply the product
Supply and Demand • Price affects demand supply in opposite ways • Market Price – the price at which buyers and sellers agree to trade • Where demand supply intersect is the market price
Questions • What is the payment for the use of capital called? • a. interest • b. profit • c. supply • d. allowance
Questions • In a circular flow of economic activity, producers need the following three resources to create goods: • a. technology, workers, money. • b. rent, buildings, money. • c. labor, land, capital. • d. tools, interest, wants.
Questions • What payment do producers exchange for the use of labor? • a. interest • b. rent • c. wages • d. market price
Questions • What is the amount of a product that buyers are willing and able to buy at different prices? • a. demand • b. supply • c. production • d. sales
Questions • What is the price at which buyers and sellers agree to trade? • a. a trade off • b. market price • c. cost of production • d. profit
- Market economy principles
- Athenian economy vs sparta economy
- Leader challenger
- Steps in market segmentation targeting and positioning
- What role should consumerism play in our economy
- What role should consumerism play in our economy
- Economic system features
- Characteristics of market economy
- The need-satisfying institutions of the market economy
- Characteristics of market economy
- Mixed market economy
- Compare and contrast market and command economy