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SAY'S LAW: A classical economic proposition stating that the production of aggregate output creates sufficient aggregate demand to purchase all of the output produced. In other words, supply creates its own demand. This is one of the three assumptions underlying the macroeconomic theory of classical economics which concluded that unrestricted market activity would generate full employment. The other two assumptions are flexible prices and saving-investment equality. Say's law is closely associated with the circular flow model.
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Lesson 10: Utility and Demand | Unit 3: Complex Choices
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Page: 11 of 21
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Topic:
Income And Prices
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- A more important constraint for most goods is that imposed by income and prices.
- Let's consider a few options.
- All Income for the Amusement Park
- All Income for the Beach
- An Extra Hour at the Amusement Park
- If I have $20 of income, the beach price is $2 per hour and the amusement park price is $4 per hour, then I will spend 4 hours at the beach and 3 hours at the amusement park.
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AVERAGE FACTOR COST CURVE A curve that graphically represents the relation between average factor cost incurred by a firm for employing an input and the quantity of input used. Because average factor cost is essentially the price of the input, the average factor cost curve is also the supply curve for the input. The average factor cost curve for a firm with no market control is horizontal. The average revenue curve for a firm with market control is positively sloped.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store trying to buy either a really, really exciting, action-filled video game or a coffee cup commemorating the moon landing. Be on the lookout for slow moving vehicles with darkened windows.
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This isn't me! What am I?
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John Maynard Keynes was born the same year Karl Marx died.
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"Good humor is a tonic for mind and body. It is the best antidote for anxiety and depression. It is a business asset. It attracts and keeps friends. It lightens human burdens. It is the direct route to serenity and contentment." -- Grenville Kleiser, Author
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CABEI
Central American Bank for Economic Integration
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