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Questions and Answers
Who is the father of economics?
Who is the father of economics?
Adam Smith
He invented invisible hand
He invented invisible hand
Adam Smith
It illustrates how individuals pursuing their own self interest in a free market can unintentionally benefit society
It illustrates how individuals pursuing their own self interest in a free market can unintentionally benefit society
Invisible hand
Companies constantly compete to innovate and improve products like smartphone or software
Companies constantly compete to innovate and improve products like smartphone or software
Farmers and food producers are guided by consumers demand for fresh produce
Farmers and food producers are guided by consumers demand for fresh produce
Refers to the overall deserve or willingness of consumers to purchase a good or services
Refers to the overall deserve or willingness of consumers to purchase a good or services
It is the specific amount of a good or services that consumers are willing to buy at a particular price point during a given period
It is the specific amount of a good or services that consumers are willing to buy at a particular price point during a given period
The demand curve is _____ because as the price of the product decreases consumer are willing to buy more of it
The demand curve is _____ because as the price of the product decreases consumer are willing to buy more of it
Price and quantity demanded have an inverse relationshipprice and quantity demanded have an inverse relationship
Price and quantity demanded have an inverse relationshipprice and quantity demanded have an inverse relationship
When demand shifted to the ____ more consumers are willing to purchase the product at various price levels
When demand shifted to the ____ more consumers are willing to purchase the product at various price levels
When demand ships to the ____ you were consumers are willing to purchase a product at a various price level
When demand ships to the ____ you were consumers are willing to purchase a product at a various price level
Quantity supplied is the specific amount of a product that is producers are willing to sell at a particular price point
Quantity supplied is the specific amount of a product that is producers are willing to sell at a particular price point
Supply is not the overall relationship between the price of a product and the amount producers or willing to sell.
Supply is not the overall relationship between the price of a product and the amount producers or willing to sell.
The supply curve is upward sloping because as the price of the product increases producers are willing to supply more of it
The supply curve is upward sloping because as the price of the product increases producers are willing to supply more of it
In law of supply price and quantity supplied have direct relationship
In law of supply price and quantity supplied have direct relationship
When supply shifts to the ____ increased supply causes the supply curve to ship to the right lowering prices and increasing output.
When supply shifts to the ____ increased supply causes the supply curve to ship to the right lowering prices and increasing output.
When supply decreases the supply curve moves to the ____ raising prices but lowering output
When supply decreases the supply curve moves to the ____ raising prices but lowering output
It is the point where the quantity of a good or service are demanded by consumers meets the quantity supplied by producers at a specific price
It is the point where the quantity of a good or service are demanded by consumers meets the quantity supplied by producers at a specific price
It occurs when the quantity demanded exists the quantity supplied at a given price
It occurs when the quantity demanded exists the quantity supplied at a given price
Occurs when the quantity supplied exceeds the quantity demanded at a given price
Occurs when the quantity supplied exceeds the quantity demanded at a given price
Adam smith was the first to use the term invisible hand to describe the natural regulation of markets
Adam smith was the first to use the term invisible hand to describe the natural regulation of markets
Through the invisible hand market prices don't act as signals to allocate resources efficiently by reflecting supply and demand conditions.
Through the invisible hand market prices don't act as signals to allocate resources efficiently by reflecting supply and demand conditions.
When the price is set above the market equilibrium it leads the producers to produce more than what consumers are willing to buy.
When the price is set above the market equilibrium it leads the producers to produce more than what consumers are willing to buy.
Invisible hand describes how through this self interested actions, the market naturally reaches an equilibrium.
Invisible hand describes how through this self interested actions, the market naturally reaches an equilibrium.
Flashcards
Adam Smith
Adam Smith
Considered the father of economics for his influential work, including the concept of the "invisible hand."
"Invisible Hand"
"Invisible Hand"
A metaphor for how self-interest in a free market can naturally benefit society.
Market Equilibrium
Market Equilibrium
The point where quantity demanded equals quantity supplied at a particular price.
Surplus
Surplus
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Shortage
Shortage
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Demand
Demand
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Demand Curve
Demand Curve
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Supply
Supply
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Supply Curve
Supply Curve
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Law of Supply
Law of Supply
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Quantity Supplied
Quantity Supplied
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Rightward Shift in Demand
Rightward Shift in Demand
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Leftward Shift in Demand
Leftward Shift in Demand
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Rightward Shift in Supply
Rightward Shift in Supply
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Leftward Shift in Supply
Leftward Shift in Supply
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Study Notes
Father of Economics
- Adam Smith is known as the father of economics for his influential work.
- He introduced the concept of the "invisible hand," illustrating how individual self-interest in a free market can lead to societal benefits.
Invisible Hand and Market Dynamics
- The invisible hand metaphor explains natural market regulation through individual actions.
- In a competitive market, companies innovate to improve products, such as smartphones and software, driven by consumer demand.
Demand
- Demand refers to consumers' willingness to purchase goods or services at a specific price during a defined period.
- The demand curve typically slopes downward, indicating an inverse relationship between price and quantity demanded; as prices decrease, consumers buy more.
- A rightward shift in demand indicates greater willingness to purchase at various price levels, while a leftward shift signifies reduced willingness.
Supply
- Quantity supplied refers to the specific amount of a product that producers are willing to sell at a certain price point.
- Supply is the overall relationship between product price and quantity producers are willing to sell.
- The supply curve slopes upward, showing a direct relationship between price and quantity supplied; as prices rise, producers supply more.
Market Equilibrium
- Market equilibrium occurs at the point where quantity demanded equals quantity supplied at a specific price.
- A surplus happens when quantity supplied exceeds quantity demanded at a given price, leading to downward pressure on prices.
- A shortage occurs when quantity demanded exceeds quantity supplied, creating upward pressure on prices.
Law of Supply
- The law of supply states that price and quantity supplied have a direct relationship; as price increases, quantity supplied also increases.
- When supply increases, the supply curve shifts right, lowering prices and increasing output; when supply decreases, the supply curve shifts left, raising prices but lowering output.
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