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AGGREGATE SUPPLY SHIFTS: Changes in the aggregate supply determinants can shift either the short-run aggregate supply curve and the long-run aggregate supply curve. The mechanism is comparable to that for market supply determinants and market supply. We have two options -- an increase in aggregate supply and a decrease in aggregate supply. An increase in resource quantity or quality or a decrease in resource prices shift the aggregate supply curves to right. A decrease in resource quantity or quality or an increase in resource prices shift the aggregate supply curves to left.
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Lesson 5: Demand | Unit 2: Law of Demand
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The law of demand is the basic principle underlying demand, one of our most important economic laws. A definition: The law of demand is an inverse relationship between demand price and the quantity demanded, ceteris paribus. - Inverse relationship means that people buy more of a good if the price is lower and less if the price is higher.
- In terms of scientific method, price causes quantity demanded. A change in the price causes a change in the quantity demanded.
Ceteris paribus is important to the law of demand.- Ceteris paribus means other things remain unchanged.
- Law of demand applies exclusively to the relationship between demand price and quantity demanded.
- All other things that can affect demand must remain constant to avoid distorting this relationship.
- Because demand is affected by many factors other than price, a buyer may buy larger amounts of a good even with a higher price.
- Other factors that affect demand are called demand determinants.
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SCIENCE A discipline, or topic of study, that uses the scientific method to investigate and explain the operation of the world by testing and verifying hypothesized relations. Science is commonly divided into physical sciences (including chemistry, physics, and biology) and social sciences (including economics, sociology, and political science). Science is not just a subject, but a method of investigation using the scientific method.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers seeking to buy either one of those "hang in there" kitty cat posters or a velvet painting of Elvis Presley. Be on the lookout for fairy dust that tastes like salt.
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This isn't me! What am I?
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A half gallon milk jug holds about $50 in pennies.
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"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
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PPC
Production Possibilities Curve
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