Economics Review: Chapters #1-6

Limited amount of resources to meet unlimited wants

2 Goods that are bought and used together

The lower the price, the more consumers will buy

Relies on custom to make most economic decisions

Economic decisions are made by individuals based on trade or exchange

States the higher the price, the higher the quantity produced

Quantity supplied is greater than quantity demanded

Something people must have to survive [food, air, water, etc]

A country must decide whether to produce more military goods or more consumer goods

When supply meets demand

Maximum price that can be charged

economy is using resources in such a way as to maximize the production of goods and services

Means buyers and sellers are focused on personal gain

Government makes most economic decisions

A shared good or service for which it would be inefficient to make consumers pay individually

Lowest price that can be paid