LABOR MARKET CAPITAL MARKET LAND MARKET
Households supply work for wages Households supply savings, firms Households supply land or other
to firms that demand labor demand funds for capital goods real property in exchange for rent
INPUT MARKETS
In which resources used to CIRCULAR FLOW OUTPUT MARKETS
PERFECT
produce products are exchanged In which goods and services
SUBSTITUTES
are exchanged
CONNECTION BETWEEN HOUSEHOLDS NORMAL INFERIOR
AND FIRMS IN THIS MARKETS GOODS GOODS SUBSTITUTES COMPLEMENTS
RELATED GOODS
AND SERVICES
PRICE
MARKETS IN THE ECONOMY
PRICE OF REQUIRED INPUTS
COST OF PRODUCING THE GOOD DETERMINANTS Where buyers and sellers interact to
TECHNOLOGIES PRICE OF THE PRODUCT PRICES OF RELATED PRODUCTS
exchange goods, services, or resources DETERMINANTS OF
INCOME TASTES AND PREFERENCES
HOUSEHOLD DEMAND
PRICES OF RELATED PRODUCTS ACCUMULATED WEALTH EXPECTATIONS
SUPPLY CURVE SUPPLY SCHEDULE DEMAND SCHEDULE DEMAND CURVE
Graph of quantities a firm would Table of quantities a firm would IN OUTPUT MARKETS IN OUTPUT MARKETS Table of quantities a household Graph of quantities a household
supply at different prices supply at different prices would buy at different prices would buy at different prices
SUPPLY AND Inverse relationship between
Positive relationship between
price and quantity supplied
LAW OF SUPPLY SUPPLY DEMAND LAW OF DEMAND price and quantity demanded
Units that a firm would sale at a particular QUANTITY SUPPLIED
DEMAND QUANTITY DEMANDED Units a household would buy at current
price during a given time period In price of a good or service In price of a good or service market price during a given period of time
↓EQUILIBRIUM PRICE AND CHANGE IN: CHANGE IN: ↑EQUILIBRIUM PRICE AND
↑ EQUILIBRIUM QUANTITY HIGHER SUPPLY DEMAND HIGHER ↑EQUILIBRIUM QUANTITY
↑PRICE AND In costs, input prices, technology, or In income, preferences, or prices
↓PRICE AND
↓QUANTITY EXCHANGED LOWER prices of related goods and services of other goods or services LOWER ↓QUANTITY EXCHANGED
Total quantity of a good or service supplied per
MARKET SUPPLY
MARKET EQUILIBRIUM MARKET DISEQUILIBRIA MARKET DEMAND
Total quantity of a good or service demanded
period by all the firms selling in the market per period by all the households in the market
Point where Quantity
supplied=Quantity demanded EXCESS DEMAND EXCESS SUPPLY
(SHORTAGE) (SURPLUS)
Quantity demanded>Quantity Quantity supplied>Quantity
supplied at current price demanded at current price
No tendency for the
market price to change
Prices tend to rise until Prices tend to fall until
equilibrium is restored equilibrium is restored
Households supply work for wages Households supply savings, firms Households supply land or other
to firms that demand labor demand funds for capital goods real property in exchange for rent
INPUT MARKETS
In which resources used to CIRCULAR FLOW OUTPUT MARKETS
PERFECT
produce products are exchanged In which goods and services
SUBSTITUTES
are exchanged
CONNECTION BETWEEN HOUSEHOLDS NORMAL INFERIOR
AND FIRMS IN THIS MARKETS GOODS GOODS SUBSTITUTES COMPLEMENTS
RELATED GOODS
AND SERVICES
PRICE
MARKETS IN THE ECONOMY
PRICE OF REQUIRED INPUTS
COST OF PRODUCING THE GOOD DETERMINANTS Where buyers and sellers interact to
TECHNOLOGIES PRICE OF THE PRODUCT PRICES OF RELATED PRODUCTS
exchange goods, services, or resources DETERMINANTS OF
INCOME TASTES AND PREFERENCES
HOUSEHOLD DEMAND
PRICES OF RELATED PRODUCTS ACCUMULATED WEALTH EXPECTATIONS
SUPPLY CURVE SUPPLY SCHEDULE DEMAND SCHEDULE DEMAND CURVE
Graph of quantities a firm would Table of quantities a firm would IN OUTPUT MARKETS IN OUTPUT MARKETS Table of quantities a household Graph of quantities a household
supply at different prices supply at different prices would buy at different prices would buy at different prices
SUPPLY AND Inverse relationship between
Positive relationship between
price and quantity supplied
LAW OF SUPPLY SUPPLY DEMAND LAW OF DEMAND price and quantity demanded
Units that a firm would sale at a particular QUANTITY SUPPLIED
DEMAND QUANTITY DEMANDED Units a household would buy at current
price during a given time period In price of a good or service In price of a good or service market price during a given period of time
↓EQUILIBRIUM PRICE AND CHANGE IN: CHANGE IN: ↑EQUILIBRIUM PRICE AND
↑ EQUILIBRIUM QUANTITY HIGHER SUPPLY DEMAND HIGHER ↑EQUILIBRIUM QUANTITY
↑PRICE AND In costs, input prices, technology, or In income, preferences, or prices
↓PRICE AND
↓QUANTITY EXCHANGED LOWER prices of related goods and services of other goods or services LOWER ↓QUANTITY EXCHANGED
Total quantity of a good or service supplied per
MARKET SUPPLY
MARKET EQUILIBRIUM MARKET DISEQUILIBRIA MARKET DEMAND
Total quantity of a good or service demanded
period by all the firms selling in the market per period by all the households in the market
Point where Quantity
supplied=Quantity demanded EXCESS DEMAND EXCESS SUPPLY
(SHORTAGE) (SURPLUS)
Quantity demanded>Quantity Quantity supplied>Quantity
supplied at current price demanded at current price
No tendency for the
market price to change
Prices tend to rise until Prices tend to fall until
equilibrium is restored equilibrium is restored
