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Economic Concepts Worksheet
Concept Application of Concept from Personal Experience Reference to Concept in Reading
Law of Demand.
In 2001, I started my mortgage financing career with demand of mortgage professionals were much needed in the market. Employers such as banks, mortgage lenders and investors were willing to pay above-market salary with great benefits package to recruit mortgage professionals into the companies. This was the time that there were limited numbers of mortgage professionals available on the job market.
This is to illustrate the law of demand. When there were not many mortgage professional on the job market looking for work, employers were more willing to pay above-market salary and benefits packages to attracts and recruit these workers. “Law of demand is a fundamental characteristic of demand. All else equal, as price falls, the quantity demanded rises, and as price rise, the quantity demanded falls.” (McConnell-Brue, 2004, p. 40)
Income effect.
My family has two vehicles, one large SUV and one midsize sedan. We usually take the SUV for family outings; however, with the gas prices being so high, we opted out of the SUV and take the midsize sedan to save some money on gasoline. “Income effect indicates that a lower price increases the purchasing power of a buyer’s money income, enabling the buyer to purchase more of the products than she or he could buy before. A higher price has the opposite effect.” (McConnell-Brue, 2004, p. 40)
Market system or capitalism.
U.S. economy is in a market system or capitalism ...