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Key Points in Economics

A unitary elasticity of supply is seen when a change in price brings about a corresponding and proportional change in the quantity of goods or services supplied. The graph below shows a unit elasticity of supply: Below is an instance of a unitary elasticity of supply: If a 100% increase in the price of wheat translates into a 100% increase in the production and supply of wheat, then the supply elasticity is said to be unitary elastic and its value is equal to 1. Unitary elasticity is always equal to 1, that is: Es = 1 The supply curve runs diagonally and will pass through the center. Supply elasticity is defined as the rate at which an increase in price of goods translates into its increased production and availability in the market. Supply elasticity is also termed as price elasticity of supply. Consider the statements below: If a 100% increase in the price of rice translates into a 100% increase in the production and supply of rice, the supply elasticity is said to be unitary elastic and its value is equal to 1. If a 100% increase in the price of rice translates into a 50% increase in the production and supply (quantity) of rice, the supply elasticity is said to be inelastic and its value will be greater than zero and less than 1. In this case, the exact value is 0.5: (value of change in the quantity of rice divided by value of change in price of rice = 50/100 = 0.5). Please read on supply elasticity here The individual demand schedule is a table that shows the demand of a commodity that an individual (consumer) purchased at various prices, and at a particular time. The table below shows an individual demand schedule: Price in Naira (of a tuber of yam) Quantity demanded (per week) 500 5 400 10 300 15 200 20 100 25 (adsbygoogle = window.adsbygoogle || []).push({}); The market demand schedule is also referred to as an aggregate demand schedule, total demand schedule or composite demand schedule. This is a table that shows the different commodities purchased by all the consumers or customers in the market. The market demand schedule is the summation of the individual demand schedules, showing the demand of different customers for a commodity at a particular price. It is shown in the table below: Unit price of commodity (Naira) Quantity demanded by consumer A (QA) Quantity demanded by consumer A (QB) Market demand (QA +  QB) 50 20 15 35 40 40 30 70 30 60 45 105 20 80 60 140 10 100 75 175   From the above table, notice that when the unit price of the commodity was 50 Naira, consumer A demanded 20 quantities while consumer B demanded 15 quantities. Please read more on demand schedule here. Below are definitions of demand from the perspective of some notable professors: The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time. Professor Mayers Demand is the various quantities of goods that would be purchased per time period at different prices in a given market. Professor Hibdon The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price. Professor Benham Generally, demand is defined as the willingness of a person, buyer or consumer to buy a specific quantity of goods or service at a given price and time. From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are: Quantity of Goods Demanded Price Time Please read more on the concept of demand here. In economics, we have various types of cost. These are: Accounting cost Economic cost Outlay cost Opportinity cost Fixed cost Variable cost Direct cost Indirect cost Sunk cost Incremental cost Private cost Social cost Please read the explanations on the aforementioned types of cost here A Black market is said to take place when there is illegal buying and selling of goods and services. Black markets usually take place outside the government's rader and without government's knowledge so as to avoid tax or any other government regulations. Black market presents the avenue for government prohibited goods like hard drugs, war weapons and firearms to be bought by criminals. A black market can also occur on the web for cyber criminals or those who are involved in computer hacking. To achieve their malicious aim, these individuals will go into the dark web and purchase or rent their respective hacking tools for a fee. Normally, payments are made in crypto currencies. However, a black market isn't generally considered as bad. Infact, it has its advantages and disadvantages. Please read more on black market here (adsbygoogle = window.adsbygoogle || []).push({}); Below are some advantages of black market: Goods and services are sold at a cheaper price. It helps some people make plenty of money. The illegal sales of human organs, for example, the sale of human kidneys have aided in saving some lives. Some people actually depend on black market for their daily bread. Some of the proceeds from black market may be utilized towards the economic growth of a nation. For instance, schools and hospitals had been built with money made from black market. The law of supply states that: The quantity of the supplied services or goods will increase as the price increases and they will decrease as the price decreases provided all other factors remain constant. These constant factors are very important when stating the supply law. They include: The price of input resources The kind of technology used during production The number of suppliers The number of buyers; and so on.   A graph that shows the relationship between the price of a product or service, and its quantity supplied is the supply curve. Supply curve can be defined as a graphical representation of the direct relationship between the prices of goods and services and the quantity supplied (of such goods and services) within a particular period of time provided all other factors remain constant. Please read more on the law of supply and supply curve here Consider the table below: Needs / Wants Cost (Naira)  Phone  50,000  Console Game  120,000  Laptop  80,000  Ipad  100,000  Smart watch  85,000  Ipod  40,000 The above table shows us what a scale of preference would look like. A scale of preference can be defined as the list of a person's needs or wants written in an order of importance. You will observe that the person puts his most important needs or wants at the top of the list. Further down the list are his less important needs. Now, let's imagine that this individual has 170,000 Naira to spend. According to the above scale of preference, the followings can be deduced; A phone will be considered to be the most important; and it costs 50,000. He buys the phone. A console game according to this person is next in importance; and it costs 120,000. He buys the console game. Another question worth asking is: What happens to his other needs? This is where the term opportinity cost comes into play. Please read more on scale of preference and opportunity cost here. Scale of Preference can be defined as the list of a person's needs or wants written in an order of importance. When you have a limited amount of money and could only buy some of the items on your list (that is, the important items to you); then the remaining items that you didn't buy will be generally considered as your opportunity cost. Opportunity cost can be defined as the value of the best alternative that a person could have achieved or bought but couldn't achieve after the best choice had been achieved. Opportunity cost are of two types. They are: Explicit Opportunity Cost Implicit Opportunity Cost Please read on scale of preference, opportunity cost and the types of opportunity cost here (adsbygoogle = window.adsbygoogle || []).push({}); Economics isn't just about money. It isn't just about economizing or efficiency or prudence at management. In simple terms, Economics is a science that deals with the study of scarcity and choice. Economics have 2 main branches. They are: Microeconomics Macroeconomics

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