Microeconomics Market system – mechanism by which a capitalist society decides how to allocate its resources. It's what actually finds the spot on the PPC for each good produced.YA BXPositively/directly related variables – When X goes up, Y goes up and vice versa. Represented by an upward sloping line (A). Negatively/indirectly/inversely – When X goes up, Y goes down, or vice-versa. Represented by a downward sloping line (B).Number of units a firm would be willing to sell: S = f(price, costs of production, tech. # of competitors)The relationship between the price a firm is able to charge and the number of resources required for production is positive. The line that represents this positive relationship is supply. Quantity supply is based on price.Demand – Must be willing able to purchase something.D = f(price, taste/preferences, disposable income, price expectations, prices of related goods)Related goods are either substitutes (why buy a slice of pizza when you can get a hamburger for less) orcomplements (if soda is too expensive, you won't buy pizza)PriceSupplyDemand Quantity sold/demandedThe only price and quantity that exists is where a trade has taken
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