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Unformatted text preview: -shortage-not enough supply to meet demand-free good-such an abundant amt. available that at price of zero, people still have all they want-relative prices-how much goods are worth in relation to each other-normative economics-“should be”, based on opinions or values-positive economics-can be proven based on experiment-entrepreneurs-take risk to change way world works, gain profit-production-alteration of materials through use of technology to make materials more valuable (includes services)-circular flow of income-households put resources into resource market, resource market gives monetary income back to households, resource market gives resources to firms, firms give wages back to resource market, firms also give goods and services to product markets, which pay for them via sales, and product market gives goods and services back to households, which pay for these via expenditures-expenditures (value of total output), sales (value of total output), wages (value of total income),...
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This note was uploaded on 05/13/2011 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.
- Fall '07