Module 9 - Fundamentals of Economic Thinking

Activity 1 : : Activity 2 : : Activity 3 : : Activity 4 : : Activity 5 : : Activity 6

Activity 1: Introduction

Understanding Supply and Demand and the Gross Domestic Product

In the course of this Module, you will become acquainted with Supply and Demand diagrams.  These are pictorial depictions of market or individual behavior in response to variations in Price.  You will come to understand and be able to put into simple words why these have the particular slopes that they do, and what these are meant to depict so far as market or individual responses to price changes are concerned.  This should help you to understand why the mathematical relationships called the “Laws” of Supply and Demand are premised upon an understanding of both Scarcity and Choice. 

This Module introduces you to the terminology and conceptual bases that economists use to “measure” and place a dollar value on the goods and services produced in a country each year.  You will come to understand those things that lead to increases in Gross Domestic Product, such as the efficient use of Resources.  You will also be introduced to the nature and functioning of the Free Enterprise System and the “Laws” that govern activity in this system.