Resources are allocated mostly by explicit instructions from some higher

Resources are allocated mostly by explicit

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Resources are allocated mostly by explicit instructions from some higher authority. (Dictatorship, government etc.) Market economy Instead of following long-held traditions or commands from above, people are largely free to do what they want with the resources at their disposal. Laissez-faire!!!” Under a capitalist economy, most resources are owned by private citizens, who are largely free to sell or rent them to others as they want. Another form of ownership is socialism, or a system of which most resources are owned by the state, as within the former USSR. The U.S. economy—like each different market economy today—uses both command and the market to allocate resources. For this reason, modern market economies are also known as mixed economies. 20 UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT IS ILLEGAL - Flashnotes.com
ECONOM 1014 Exam 1 Study Guide Principles of Microeconomics - Klein pg. 21 Chapter 3 Reading Notes A market is a group of consumers and sellers with the potential to trade with one another. aggregation—combining several of distinct things into one whole. In absolutely competitive markets (or just competitive markets), every customer and merchant takes the market price as a given. The supply and demand model is meant to point out how costs are determined in perfectly competitive markets. Demand The quantity demanded of a good or service is a range of units that each consumer would choose to purchase over a given period, given the constraints that they face. Quantity Demanded… Implies a choice Is hypothetical Depends on price Law of Demand: states that once the price of a good rises and everything else remains constant, the amount of the good demanded will decrease. “Ceteris Paribus”: “All else the same” Demand Curve: shows the link between the worth of a good and therefore the amount demanded within the market, holding constant all alternative variables that influence demand. Every point on the curve shows the overall amount that consumers would choose to buy at a particular price. A change in any of the variables that affects demand—excluding the good’s price—always causes the demand curve to shift. When buyers choose to buy a larger quantity at any price, the demand curve shifts to the right. If they would decide to buy less quantity at any price, the demand curve shifts to the left. Q uantity Demanded 21 UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT IS ILLEGAL - Flashnotes.com
ECONOM 1014 Exam 1 Study Guide Principles of Microeconomics - Klein pg. 22 a certain amount that buyers would choose to buy at a certain price, represented by a single one point on the demand curve. Demand means the entire relationship between price and quantity demanded, illustrated by the whole demand curve. Change in Quantity Demanded when a price change of a good moves us along the demand curve. Change in Demand when something besides the price changes, and it causes the whole demand curve to shift. Factors That Shift the Demand Curve Income Wealth Price of Related and Similar Goods (Substitutes) Population

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