ECON 101 Lecture Notes - Lecture 7: Demand Curve, Economic Equilibrium, Absolute Advantage
Document Summary
Alternative interpretation of demand the maximum willingness to pay. Quantity supplied the amount of a good or service that a firm is willing and able to supply at a given price. Supply schedule a table showing the relationship between the price ofa product and the quantity of the product supplied. The law of supply holding everything else constant, the higher the price, the higher the supply. The lower the price, the lower the supply. Shortage: a situation in which the quantity demanded is greater than the quantity supplied. Surplus: a situation in which the quantity supplied is greater than the quantity demanded. The effects of shifts in demand and supply on the market equilibrium can be demonstrated through shifts in the supply and demand curves. Original idea - adam smith: wealth of nations . They chose to allocate their resources in high-- end military products instead of continuing with laptop production.
