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Economic and management sciences

Grade 7

Economic principles

Module 2

Demand and supply

What is meant by demand and supply?

Before motor cars appeared on our roads, people used to travel on horseback. Supposing everybody decides to start travelling by car, instead of on horseback. What will happen in everyday life?

  • Does the government decide to build factories in Uitenhage and tell workers to relocate and work in the factories?
  • Are horse-breeders told to scale down on horse-breeding?
  • Does government decide that it would be better to start growing cotton for upholstering car-seats, and that less hay should be grown to feed the horses?

Of course government did nothing of the kind. Consumers bought more motor cars and fewer horses. What happens now?

  • Due to higher profits in the motor car industry, more car factories are erected, and workers move to those areas to find jobs.
  • The price of horses drop, and horse-breeders find other ways of making money.
  • As less hay is needed for feeding the horses, the price of hay comes down and other crops have to be planted.
  • At the same time the demand for raw materials such as steel, cotton and rubber increases, as it is needed for the manufacturing of cars. As the prices of these commodities also escalate, more businesses turn to manufacturing.

Eventually the demand for horses decreased by 90% in the previous century, while millions of cars were manufactured.

What was the reason for this revolution? It was caused by changes in buyers’ preferences and new technology resulting from the forces of demand and supply.

Similar changes constantly occur in the economic field, as buyers’ preferences change and new production methods are developed.

“Free” and “Economic” goods

Free goods

When goods exist in such large quantities, like e.g. seawater or air, we can use as much of it as we wish, without paying for it. In other words, it is freely available to all.

Economic goods

When something is scarce and there is a big demand, we have to pay for it. These goods are not always plentiful, and the less there is, the more we have to pay for it.

If everything that we need is plentiful, and the prices are low, we will all lead comfortable lives, and no-one will be worrying about the distribution of income among people. Everybody will be able to have as much as they want, of whatever they want. In such a society of prosperity, there will be no economic goods.

Activity 1:

To distinguish between wants and needs

[lo 1.1]

  • What is the difference between wants and needs ?
  • Write the following items in the appropriate column:

CD’s, bicycle, ski-vacation, swimming-pool, iPod, medical services,

cellphone, bread flour, clean air, purified water

Needs Wants

Far too many flat-screen television sets

All of a sudden there is a surplus of high technology flat-screen lcd television sets. Or rather, there are far more of them in the shops than consumers want to buy. World market-leaders Samsung and LG Philips overestimated the demand for flat screens when they invested tens of millions of rands in new factories over the past few years.

Questions & Answers

How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
scanning tunneling microscope
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
How can I make nanorobot?
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
how can I make nanorobot?
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
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Source:  OpenStax, Economic and management sciences grade 7. OpenStax CNX. Sep 10, 2009 Download for free at http://cnx.org/content/col11025/1.1
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