Chapter 3: Supply, Demand, and Market Equilibrium
Quick review over Chapters 1 & 2
Scarcity & Choice
Recall: What is the economic problem?
Providing for people's wants and needs in a world of scarcity
Recall: What is economics about?
About how people make
The Market System & Circular Flow
Economic Systems: Differ in two important ways:
A. Who owns the factors of production.
B. The method used to coordinate economic activity.
Command Systems: economy: socialism or communism
-There is public (state
Limits, Alternatives, and Choices
Chapter 1 introduces economics as the study of how people decide how to use scarce productive
resources to satisfy economic wants.
*Human wants to far exceed the ability (limited resources to satisfy t