ECN 102 Lecture 2: ECON FINAL CH 1
Document Summary
Technological change: is the development of new goods and of better ways of producing goods and services. Firm: is an economic unit that hires factors of production and organizes those factors to produce and sell goods and services. Market: is any arrangement that enables buyers and sellers to get information and do business with each other. Property rights: are the social arrangements that govern ownership, use, and disposal of resources, goods or services. Money: is any commodity or token that is generally acceptable as a means of payment. Substitution effect: when the relative price (opportunity cost) of a good or service rises, people seek substitutes for it, so the quantity demanded of the good or service decreases. Income effect: the price of a good or service rises relative to income, people cannot afford all the things they previously bought, so the quantity demanded of the good or service decreases. When demand increases, the demand curve shifts rightward.
