by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are Fixed Inputs? We can describe inputs as either fixed or variable. Fixed inputs are those that can’t easily be increased or decreased in a short period of time. In the pizza example, the building is a fixed input. Once the entrepreneur signs the lease, he or...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are Factors of Production? Economists divide factors of production into several categories: Natural Resources (Land and Raw Materials) – The ingredients for the pizza are raw materials. These...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Substitution Effect? The typical response to higher prices is that a person chooses to consume less of the product with the higher price. This occurs for two reasons, and both effects can occur simultaneously. The substitution effect occurs when a price...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Factors Affect Demand? The following factors often affect the demand for a product: Taste Shift Change in Population Change in Income Change in Price of Substitute Goods Change in Price of Complementary Goods Future Expectations of Financial Position A change in...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Affects Supply? Supply is made up of what producers bring into the market for consumers to purchase. As such, numerous factor can affect the supply or amount of production. The factors of production known to shift the supply curve include: Production costs...
