Opportunity cost Highest-value option forgone

The goods which its quantity available is insufficient to satisfy all our
Economic goods
wants. More of it is preferred
The goods which its quantity available is insufficient to satisfy all our
Free goods
wants. More of it is preferred
Is an activity through which resources are transformed into goods and
Production
services.
Consumption Is an activity through which human wants are satisfied
To a borrower, interest is the cost of earlier availability of goods or
resources. The borrower pays interest to obtain the goods earlier
Interest
To the lender, interest is the compensation for deferring consumption of
goods
What to produce It concerns with types and quantities of goods and services to produce
It concerns with the choice of production method to minimize production
How to produce
costs
It concerns with how goods and services to be distributed among
For whom to produce
different people in the society
Exclusive right to use the good
Private property right Exclusive right to receive income generated by the use of the good
Exclusive right to transfer the good
Statement concerns with what is and what is not
Positive statement
-can be refuted
Statement concerns with what should be or what ought to
Normative statement
-cannot be refuted
It stated that price and quantity demand are negatively related, ceteris
Law of demand
paribus
It stated that price and quantity supplied are positively related, ceteris
Law of supply
paribus
Money price It is the price of a good expressed in terms of money
Relative price It is the price of a good expressed in terms of other goods
Changes of consumers’ income
Income↑ : Superior goods D↑ Inferior goods D↓
Income↓ : Superior goods D↓ Inferior goods D↑
Changing price of a Substitute
P↑ : D for its substitute↑
P↓ : D for its substitute↓
Changing price of a Complement
Factors affecting demand P↑ : D for its complement ↓
P↓ : D for its complement ↑
Derived Demand
D↑ : D of its factor of production↑
D↓ : D of its factor of production↓
Consumers’ expectations of future price
Expected P↑ : D↑
Expected P↓ : D↓
Factors affecting supply Goods in joint supply
P↑ : Qs↑(law of supply) S of by-product↑
P↓ : Qs↓(law of supply) S of by-product↓
Competitive supply
P↑ : Qs↑(law of supply) S-other goods↓
P↓ : Qs↓(law of supply) S-other goods↑
Change in Cost of production
cop↑ : S↓
cop↓ : S↑
The state of Technology
Tech↑ : S↑
Tech↓ : S↓
Producers’ expectation of future price
Expected P↑ : S↓(present)
Expected P↓ : S↑(present)