Hope your week went well. These may be basic facts known to many but I am afraid that I have misunderstood the terms.

  1. Does quantity of a good mean the amount demanded or supplied?
  2. Does output refer to the amount of a good which is produced within a given time frame? In simple words, how is output different from quantity demanded/ supplied and is output strictly used in macroeconomics as the 'quantity or amount' of a good produced within a time frame?
  3. when we talk about level of something such as level of output or level of utility, what does ''level'' mean? Does level of output mean quantity or amount of output? Does level of utility mean level of satisfaction? So is it right to say consumers wish to maximize utility or consumers wish to maximize level of utility?
  4. When looking at the marginal efficiency of investment, we say that as interest rate increases, the level of investments fall or should it be an increase in interest rate causes investments to fall? I am unsure how the level of investment vs investment itself differ?

1 Answer 1


Here are answers to several of your questions:

a) In the context of supply and demand curves in introductory microeconomics, there is both "quantity demanded" and "quantity supplied". Both of these quantities depend upon the price, as described by the supply and demand curves. These two quantities are equal when the market is in competitive equilibrium.

b) I think the word "output" is used in a variety of contexts. In some contexts, "output" may mean "quantity supplied", in other contexts it could mean GDP.

You ask whether "output" refers to an amount produced within a given time frame. Often, the answer is yes. For example, GDP is the output of an economy per year. However, issues relating to time are (unfortunately) often ignored in introductory economics.

c) It may be misleading to think of level of utility as "level of satisfaction". In basic utility maximization where there is no uncertainty or risk, utility is ordinal. If one basket of goods has utility=10, and another has utility=1, then the first basket is preferred over the second basket, but it is not true that the consumer is 10 times more "satisfied" with the first basket than the second basket.

More generally, "level" just means "amount".

d) I would recommend posting this as a separate question, and maybe provide a bit more detail.


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.