used to refer to desired purchases, and such phrases as quantity bought
quantity exchanged are used to refer to actual purchases.
Second, quantity demanded refers to a flow of purchases, expressed as so
much per period of time: 1 million units per day, 7 million per week, or
365 million per year. For example, being told that the quantity of new
cars demanded (at current prices) in Canada is 50 000 means nothing
unless you are also told the period of time involved. For a country as large
as Canada, 50 000 cars demanded per day would be an enormous rate of
demand, whereas 50 000 per year would be a very small rate of demand.
The important distinction between stocks and flows is discussed in
Extensions in Theory 3-1.
Extensions in Theory 3-1
The Distinction Between Stocks and Flows
An important conceptual issue that arises frequently in
economics is the distinction between stock and flow variables.
Economic theories use both, and it takes a little practice to
keep them straight.
As noted in the text, a flow variable has a time dimension—it is
so much per unit of time. For example, the quantity of Grade A
large eggs purchased in Edmonton is a flow variable. No useful
information is conveyed if we are told that the number
purchased was 2000 dozen eggs unless we are also told the