{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}


1 macro 51 implications of circular implications flow

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: R IMPLICATIONS FLOW MODEL 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” Profits factor 6 HOW DOES A MARKET HOW ECONOMY ANSWER THE THREE QUESTIONS? THREE 1. What to produce? A. By $ votes cast by HH A. 2. How to produce? A. By least-cost combination A. of resources selected by business firms business 3. For whom is the output produced? For A. Who earns the income? A. 7 THE PRODUCT MARKET: THE DETERMINANTS OF DEMAND DETERMINANTS What is a demand schedule? What A hypothetical choice function hypothetical relating quantity demanded of X to P(x), all other things equal. What are the “determinants” of demand? demand? 1....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online