Market System-the private ownership of resources and the use of markets & prices to coordinate and direct economic activity-also known as capitalism-Gov't has role in providing certain goods & services that are under produced or not produced at all-each individual seller controls their price and what they sell through competition, B. Command economy-gov't owns most property resources and economic decision making occurs through a central economic plan- takes the freedom away from the people and the gov't makes all decisions.-A. Law of Demand-price falls, quantity demanded rise-B. demand curve slopes downward b/c price & quantity are inverse-C. Determinants of demand-consumer preference, # of consumers in market, consumer income, $ of related goods, consumer expectations (future $ & income)-demand up, curve right, demand down, curve left. Change in demand-shift of entire demand curve to the right (Increase) or left (decrease) b/c of change in 1+ of determinants-Change in quantity demanded-movement from one point to another point-from one price quantity combo to another on a fixed demand schedule or demand curve-Cause: rise or fall in the price of the product under consideration. Law of Supply-$ rises, quantity supplied rises, $ falls, quantity supplied falls. Supply curve slopes upward b/c $ rises, quantity rises (vice versa).Determinants of supply-resource $, technology, tax & subsidies, $ of other goods, price expectations, # of sellers in market-Supply rises, curve right, supply falls, curve left-change in supply-change in entire supply schedule & shift of entire curve b/c of change in 1+ determinants-Change in quantity supplied-movement from one point to another on fixed supply curve b/c of change in $ of specific product under consideration-Price rises, production rises, consumption falls-competition narrows price range so companies can still make profit, consumers buy more when $ reasonable & production is moderate still for company-competition sets bar as voice from consumers as to what we are willing to pay.
