Economics Ch 3

• an inverse relationship between the price of a good and the quantity of its buyers
• price increase, buyers purchase less
• price decrease, buyers buy more

products that serve same purpose

difference between max price consumers are willing to buy

• products usually consumes jointly
• decrease of price of one will cause an increase in demand for the other

• total economic cost of producing a good service
• equal to the value of the production of other goods sacrificed as the result of producing the goods

• excess of sales revenue relative to the opportunity cost of production
• acrues when value of the good produced is greater than the value of the resources

• deficit of sales revenue relative tot he opportunity cost of production
• penalty imposed on those who produce goods even though their value is less than the resources

states that direct relationship between the price of a good and quantity of its producers are willing to supply

• difference between the price suppliers actually receive and the minimum price they willing to accept
• measure the net gains to producers and resource suppliers

• abstract concept encompassing the forces of supply and demand
• interaction of buyers and sellers

• conflicting forces of supply and demand are in balance
• decision of consumers and producers are brought into harmony with one another

• potential gains from trade have been realized
• creates more benefit than cost

direct individuals pursuing their own interests to engage in activities promoting the economic well-being