law of demand

when the price of a good decreases demand for it increases and vice versa

law of supply

when a price of good or servicce increases so will the quantity and vice versa

demand

consumer willingness and ability to buy goods in a given period of time at a given price ceteris paribus

supply

amount of resources farmers, labourers, firms and financial assets are willing to produce in a given period of time at a given price, ceteris paribus.

joint supply

one product is a byproduct of another, where producing one good leads to the increase of the production of the other ; e.g beef & leather; milk and cheese

competetive advantage

when a firm/supplier has a certaina advantage over other substitue products which would want to make consumers be willing to spend on their goods or services more compared to others.

demand side factors

seasonal factors; seasonal demand; consumer change in taste/preferences; change in price

factor prices

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4 factors of production

land, labour, entrepreneurship, capital

basic economic problem

unlimited needs and wants yet limited resources, markets help allocate these resources

income

earnings from work/investment

expenses

the cost a company needs to use to generate revenue

net profit

gross profit - expenses

gross profit

sales revenue - cost of goods/service sold

market

a group of buyers and sellers of a particular good or service

inventory

the quantity of goods that a firm has on hand

price mechanism

acts to restore the equalibrium

relative scarcity

resources are scarce relative to the demands for goods and services

remeber

write the economic state if a question talks about how this affects this...

4 KEY QUESTIONS

how to produce, for whom to produce, what to produce, how much to produce

supply factors

price, the number of suppliers, the state of technology, government subsidies, weather conditions and the availability of workers to produce the good

thinking process

think about all the steps, like if demand is increased so will price so demand will decrease yet supply already increased to fit in with demand so a new equalibirum is formed with higher price and supply, making this a surplus