Topic 1

Question 1

3 main actors/agents in economics

Answer 1

• Households/consumers/workers: Source of demand for goods/products and
  services & source of labour
• Firms: source of product supply of “private goods” and demand for labour
• Government: source of supply of “public goods” (e.g. national defence);
  regulation (affect all the markets economy)

Question 2

3 main markets

Answer 2

• Goods/products market (focus of this course)
• Labour market (minimum wage/HR, etc.)
• Financial market (stock/share/corporate borrowing, etc.)

Question 3

Diminishing marginal utility

Answer 3

The more volume you consume a good or service, the less utility you recieve from another unit of it.

Question 4

Different reservation prices

Answer 4

• Different consumers will have different reservation purchasing prices
• Different producers will have different reservation selling prices

Question 5

Marginal vs Inframarginal

Answer 5

• Marginal: extra unit
• Inframarginal: the rest

Question 6

Demand vs Supply Curve

Answer 6

• Demand Curve: Downwards Sloping
• Supply Curve: Upwards Sloping