An economy of a country consisted of labor, capital and land resources an could be also describe as a social network, where goods and services are exchanged according to the laws of supply and demand.
Supply and demand is the most fundamental concepts of economy and is used mostly in the market economy. Demand refers to the quantity or how much the consumer is willing to buy and is affected by the increase and decrease of prices. The law of Demand states that "as prices increases, the demand decreases." Supply represents how much the market can offer. The quantity of supply refers to the amount of a certain good, that the producers are willing to buy when receiving a certain price. Therefore the price is the inverse of demand and supply.
VEBLEN GOODS & GIFFEN GOODShigh status items such as luxurious cars, expensive clothes or jewelry is what every men and women wants. Veblen goods is what appeals the most to us, because it shows high value and the demand increases as the price increases. Similar to Veblen goods, the other type of good that is part of the demand law is Giffen goods. The demand for Giffen goods increase as the price increase, because people value them as a higher quality. Both names come from famous economist who attributed their ideas to the law of demand.
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