Ecs2601 Assignment 4 Semester 1 2024

Ecs2601 Assignment 4 Semester 1 2024 Microeconomics - A branch of economics that deals with the behaviour of individual economic units. Economic Model - The interacting relationship between two or more economic variables. 3 Fundamental Questions of Economics - 1. What to Produce 2. How Much to Produce 3. For Whom to Produce Emergence of Price - The interaction between consumers and producers interacting on the market. The Market is in Equilibrium - The market is in Equilibrium with no Surplus or shortages. Thus there are no pressures for the prices to change. Market Mechanism - The tendency in a free market for Price to change until the market clears. Equilibrium Price - The price at which the market is in equilibrium. Thus the quantity supplied equals the quantity demanded at a specific price. Qs = Qd Disequilibrium - Any point on the graph that is not at the equilibrium point. Surplus - Qs > Qd Shortage - Qs < Qd Demand Curve - The quantity of goods "consumers" are willing to buy at a specific price. (Maximization of Utility) Influenced by budget constraints.