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FLOW Product markets
Product Households are buyers Business firms are sellers Resource markets
Resource Households are sellers Business firms are buyers Upper loop vs. lower loop values Are identical Profits as the “balancing”
factor 6 HOW DOES A MARKET
ECONOMY ANSWER THE
1. What to produce?
A. By $ votes cast by HH
2. How to produce?
A. By least-cost combination
of resources selected by
3. For whom is the output produced?
A. Who earns the income?
7 THE PRODUCT MARKET:
DETERMINANTS OF DEMAND
DETERMINANTS What is a demand schedule?
What A hypothetical choice function
relating quantity demanded of
X to P(x), all other things equal. What are the “determinants” of
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This note was uploaded on 01/12/2012 for the course ECN 211 taught by Professor Kingston during the Spring '08 term at ASU.
- Spring '08