Introduction:

Capitalism starts with a fundamental belief that, in general, when the individuals in
a society are allowed to act in their own financial interest, that society as a whole is
better served, even though the constituents in that society arent doing so
purposefully. Economics is divided into micro and macroeconomics. The former
studies how smaller entities, such as individuals, allocate scarce resources. The
latter deals with the aggregate economy as it is affected by millions of actors; it also
deals with policy. Economists make fundamental philosophical assumptions from
which they create simplifications and hence use mathematics to explain and justify
economics.
Lesson 2:
The law of demand states that as the price of a product or service increases, the
quantity demanded for that good/service decreases. (Quantity demanded is
different from demand; demand is the geometrically displayed relationship between
price and quantity demanded.)
Lesson 3:
The price of related goods affect demand. Changing one of the factors of demand
will shift the entire demand curve for a given product. This is when the situation is
not ceteris paribus. If a complements (such as a Kindle to an eBook) or a
substitutes (Narnia to LOTR) price changes, it will affect the products sales.
Lessons 4:
At any given price points along a demand curve, if consumers expect a goods price
to increase, the quantity demanded at that price point will increase. This will cause
the entire demand curve to shift to the right to maintain balance. At any given price
point, if consumers expect a goods price to decrease more than the time factor
would dictate, the quantity demanded at that price point will decrease.
Lesson 5:
Numerous other factors, such as changes in income, population, and preferences,
all affect demand (the entire curve.)
Lesson 6:
Normal goods are goods for which demand is increased when the income of the
populace rises. Inferior goods are goods for which demand decreases when income
rises. No good is permanently attached either of those categories; a goods
classification is based on circumstantial factors.
Lesson 8:
The law of supply states that the quantity of a good being supplied to market in a
given time period will increase if the price of that good is driven up by the market,
and vice versa.

Lesson 9:
Various factors, such as improvement in technology, can affect supply.
Lesson 10:
Long term supply curve
Lesson 11:
Market Equilibrium occurs when the supply and demand curves intersect (remember
that supply and demand are charted relative to the same factors, quantity
demanded and price).
Lesson 12:
Changes in market equilibrium; various circumstances can cause the demand and
supply curves to shift relative to one another.
Lesson 13:
Breakdown in gas prices; between the producers, the refiners, and the suppliers, the
cost of gasoline is driven up. The producers receive the most profit. Some
corporations are vertically integrated.
Lesson 14:
Short run oil prices- market psychology, as well as complicated stock actions
involving options, affect the short term (months to a year or two)
Lesson 1: Price Elasticity of Demand
Elasticity of demand is the impact affected upon the quantity demand by price
change. This value is measured in percentage, as percents are unit-less and hence
immune to the aspects of various scenarios. The degree of elasticity (whether it is
very elastic or inelastic) is determined by how much a given % change in price
elicits a large or small % change in quantity. To calculate price elasticity of demand,
divide percent change in quantity by percent change in price.

Unit Elasticity maximizes profits