Chapter 3

Chapter 3 - Chapter Three Supply and Demand Market...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter Three: Supply and Demand Market Participants o The goal is to maximize the utility we get from our available incomes. o Businesses try to maximize profits. o The basic goals of utility maximization, profit maximization, and welfare maximization explain most market activity. o Economic interactions with each other are necessitated by two constraints: Our absolute inability to produce all the things we need or desire. The limited amount of time, energy, and resources we have for producing those things we could make for ourselves. The Circular Flow o Factor Markets – any place where factors of production are bought and sold. o Product Markets – any place where finished goods and services are bought and o The consumer is the final recipient of all goods and services produced. Locating Markets o The term market refers to a place or situation where an economic exchange occurs—where a buyer and a seller interact o Every market transaction involves an exchange of dollars for goods or resources o Supply – the ability and willingness to sell specific quantities of a good at alternative prices in a given time period, ceteris paribus. o
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/18/2008 for the course ECON 202 taught by Professor Woroby during the Spring '08 term at Towson.

Page1 / 3

Chapter 3 - Chapter Three Supply and Demand Market...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online