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The Law of Supply and Demand is the basic principle on which a market economy is based. This principle reflects the relationship between the demand for a product and the quantity offered of that product. Actually taking into account the price at which the product is sold.
Monetarism is a branch of economic thought and studies how money affects the economy. Certainly, money is a fundamental part of the economic structure. Moreover it is essential to carry out commercial exchanges, acquire materials for production. Actually it is even vital to pay wages.
Consumer surplus is the amount that buyers are willing to pay less than the amount actually paid, measures the benefit that buyers receive from a good in terms in which they perceive. For example , if John wants a product and that product is willing to pay 100. And when you get to the store is that the product is now on sale and costs 80. Then it is said that John has a consumer surplus of 20. Keep up reading to know more about consumer and producer surplus.
The frontier of production possibilities is a model of the marginalist school, which contains the combinations of theories corresponding to production. Alon with resources and technologies in which maximum production is achieved. It is a reflection of the amount of goods and services that a company produces in a given period of time. This is done taking into account the technology and knowledge that said company has to carry out said production. It is worth noting that it is a graphic representation. Actually it reflects as we mentioned before the maximum amount of production that can be obtained. Nor carried out by a company during a certain period of time. If you want to know more about production possibilities frontier and its characteristics, stay with us!
The utility refers to the degree of satisfaction that receives the consumer to purchase a particular product. To some extent, while consumers purchase more units per unit time, the higher the total utility received. Although, the total utility increases, the marginal utility receiving consuming each additional unit of the good usually decreases.
