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# Economic Sciences This document discusses the functioning of markets and the economic system. ## Demand-Side * Consumers seek goods and services at certain prices. * Demand is influenced by quantity. ## Supply-Side * Providers supply goods and services. * Quantity depends on the availability...

# Economic Sciences This document discusses the functioning of markets and the economic system. ## Demand-Side * Consumers seek goods and services at certain prices. * Demand is influenced by quantity. ## Supply-Side * Providers supply goods and services. * Quantity depends on the availability of goods and services. ## Market Interactions * **Exchange Mechanism:** Buyers obtain desired goods/services in exchange for a mutually acceptable payment (typically money). * **Price as a Decision Mechanism:** Market prices determine the compatibility of decisions among economic actors in the market. * **Market Classification:** Markets are categorized into product markets and factor markets. ## Economic System Visualization The document includes a diagram illustrating the economic system as a circular flow. * **Households:** Represent the demand side, owning resources and consuming goods and services. * **Firms:** Represent the supply side, producing goods and services using resources. * **Product Markets:** The exchange of goods and services between firms and households. * **Factor Markets:** The exchange of resources (labor, capital) between households and firms. * **Money Flow:** Money flows from households to firms in exchange for goods/services, and from firms to households in exchange for resources. The diagram visually represents the circular flow of economic activity. The arrows show the flow of goods, services, and money between households, firms, product markets, and factor markets. **Source:** Alexis Jacquemin, Henry Tulkens, Paul Mercier, Fondements d'économie politique