Download supply and demand is an economic model of price determination in

Omar Al- Ghamdi
200700434
Assignment #1
ECON 1311-103 Introduction to Macroeconomics
Chapter One:
Scarcity: In economic scarcity means that economic resources not have in country
Enough causing fear among the population of the future.
EX: In African, wheat scarcity and drought make the population hunger and fear of
the future.
efficiency: It means the society able to find the best results with the scarcity of
resources
EX: With scarcity of resources in India, they able to get best result with that, by the
government's support for the cultivation and sale of products to other countries
Macroeconomics and Microeconomics: Macroeconomics is Broader and more
general and in order to understand the local and global economy and work to develop
it unlike Microeconomics which focuses on the individual parts of the economy.
EX: GDP, unemployment rates, and price indices are example of Macroeconomics
on the other hand buying and selling individual valet example of microeconomic.
Normative vs. positive economics: Positive economics is the study of the causal
relationships that exist in the economy. It just states what the relationship is. on the
other hand Normative is a study of what economic relationships ought to be. Value
judgments play an integral part in the ranking of possible objectives and the choices to
be made among them
EX: if there is an increase in the prices of basic food commodities, price and
consumption in this example is a positive economic statement.
Fallacy of composition, post hoc fallacy: The fallacy of composition shows that just
because something is true for an individual unit, on other hand post hoc fallacy is a
fallacy that in which one event is said to be the cause of a later event simply because
it occurred earlier.
EX: If you go to the beach and it rains, you cannot assume that it rains because you
go the beach and this is example of post hoc fallacy.
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Chapter Two:
Market: The mechanism and place which combines buyers and sellers to dealing
together and negotiate about goods and price.
EX: The Dhahran mall.
Markets for goods and for factors of production: describe the inputs that are used
in the production of goods or services in the attempt to make an economic profit.
EX: The firm must consider how the quantity of apples it can harvest and sell is
affected by the number of apple pickers.
Prices: When you go to supermarket and want to buy goods, the value of goods is
called price.
EX: The price of Pepsi is one RS and half.
Market Equilibrium: A situation in which the supply of an item is exactly equal
to its demand. Since there is neither surplus nor shortage in the market, price tends
to remain stable in this situation.
EX: If tomato is neither surplus nor shortage in the market, price tends to remain
stable in this situation
Chapter Three:
Supply and demand analysis: supply and demand is an economic model of price
determination in a market. It concludes that in a competitive market, the unit price for
a particular good will vary until it settles
EX: Companies use market demand analysis to understand how much consumer
demand exists for a product or service.
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Demand schedule: is a table of the quantity demanded of a good at different price
levels.
EX: Like a menu in restaurant.
Law of downward-sloping demand: When the price of a commodity is raised and
other things are held constant, buyers tend to buy less of the commodity. Similarly
when the price is lowered other things being constant and quantity demanded
increases.
Chapter twenty:
National income and national accounts: The national income and product accounts
are part of the national accounts of the country. They are produced by the Bureau of
Economic Analysis of the Department of Commerce. They are one of the main
sources of data on general economic activity in the country.
Real GDP: Real GDP is a macroeconomic measure of the value of output economy,
adjusted for price changes. The adjustment transforms the nominal GDP into an index
for quantity of total output.
Nominal GDP: Nominal GDP is the market value (money-value) of all final goods
and services produced in a geographical region, usually a country.
GDP deflator: Gross Domestic Product deflator. A measure of the change in prices
of goods newly produced within a country over the course of a specific time period. It
is used in economics to account for inflation. When the deflator is used, it allows
GDP to be compared to other time periods in constant dollars.
Investment: The spending on capital equipment, inventories, and
structures including new real state.
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