Economics is the study of scarcity, decision-making, and how people allocate limited resources. It can be divided into microeconomics, which examines individuals and firms, and macroeconomics, which looks at entire markets and the national economy. Demand refers to how much of a product is wanted by consumers, while supply represents how much the market can offer. When demand or supply shifts, the demand or supply curve moves to a new position, impacting the price and quantity in the market.

1. ECONOMICS
It’s the study of scarcity, the
study of how people use
resources and respond to
incentives, or the study of
decision-making.
• MICROECONOMICS
• MACROECONOMICS Prepared by: Jess Henson

2. CHAPTER 4
refers to how
much (quantity)
of a product or
service is
desired by
buyers.
represents how
much the market
can offer.

3. SCARCITY OPPORTUNITY
COSTis fewer resources
than are needed to fill
human wants and
needs.
the loss of potential
gain from other
alternatives when one
alternative is chosen.
“there will always be substitutes and complements to
anything and everything”
Are all economic goods replaceable?
How about free goods?

4. The demand curve is a visual representation
of how many units of a good or service will be
bought at each possible price.

5. Prince per piece Quantity demanded
10 15
8 30
6 45
4 60
INVERSE RELATIONSHIP
the price goes down, the quantity demanded goes up

6. SHIFTS IN DEMAND CURVE

7. SHIFTS IN DEMAND CURVE
FACTORS THAT CAN PRODUCE
• Consumer income
• Population
• Consumer preferences
• Price availability of related goods
 Complementary Goods
 Substitute Goods

8. Normal goods are any goods for which demand
increases when income increases, and falls when
income decreases but price remains constant.
Veblen good is a good where an increase in price
encourages people to buy more of it.
Inferior good is a type of good that decreases in
demand when income rises.
TYPES OF GOODS

9. Demand elasticity refers to how sensitive the
demand for a good is to changes in other
economic variables, such as the prices and
consumer income.
𝐸 =
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒

10. CATEGORIES OF ELASTICITY OF DEMAND
PERFECTLY INELASTIC

11. CATEGORIES OF ELASTICITY OF DEMAND
INELASTIC

12. CATEGORIES OF ELASTICITY OF DEMAND
UNITARY ELASTIC

13. CATEGORIES OF ELASTICITY OF DEMAND
ELASTIC

14. CATEGORIES OF ELASTICITY OF DEMAND
PERFECTLY ELASTIC

15. The supply curve graphic
representation of the relationship
between product price and quantity
of product that a seller is willing and
able to supply.

16. Prince per piece Quantity
5 0
15 3
30 6
45 9
DIRECT RELATIONSHIP
the higher the price of products, the higher the
sellers have to produce and sell more quantities

17. SHIFTS IN SUPPLY CURVE
FACTORS THAT CAN PRODUCE
• Size of industry
• Technological progress
• Education
• Price of inputs
• Price of related outputs

18. ELASTICITY OF SUPPLY