Defining Economic Essay

1139 Words Sep 18th, 2013 5 Pages
Defining Economic

Economic is the social science that examines how people, government, businesses, and nation make choice on dealing with limited resources to satisfy their wants and needs. Economic is broken down into many forms. First there is macroeconomic, which focus on the behaviors of the combined economy. Next there is microeconomics, which is the study on separate buyers. The central to solving economic divided into three parts. First, is what products need to be produce, and how much to produce. Second, is how the products will be produce. Last, who are the products produce for (Colander, D. C. 2008). Microeconomic is the study of the market performance of individual buyers and firms in an effort to understand the
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Buyers often have more demand of products sold at a lower price because they want to save their money for other products. Both the law of supply and demand can be demonstrating on chart. Using Q for quantity and P for prices, you can see the difference between the laws of supply and demand. When the price of the product is at a low point the quantity of producing that products will be low, as the price of the products increase the production of the product will raise. This is the demonstration of the law and supply. The chart demonstrating the law of supply, you will see that it is often show an upward slope. On the other hand the law of demand is reverse to the law of supply. When P (price) is at a high point, the Q (quantity) is less wanted. However, when the price for the products decreased the demanded of the product will rise. On the chart of the law of demand, the a downward slope will be seen. Factors that changes the demand are varies. One of the most important factors that change the demand is individual income. When individual income increase, the demand for goods can increase or decrease. Individuals who make more money to afford for the luxury goods he or she wants, such as clothes and foods, this good is refer as normal goods. The upsurge of income will also allow people to reduce the demand of inferior goods. An example of inferior goods would be beans because now those individuals have more money to purchase meat, they do not

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