Studied by 1 person
market
way of bringing together buyers and sellers to buy and sell goods and services
types of economies
command economies - govt. controls the market
free market - no government
mixed economy - free market yet government will intervene
market economy
an economy in which scarce resources are allocated by the market forces of demand and supply
planned economy
the allocation of scarce resources is controlled by the state
primrary sector
the direct use of natural resources, such as the extinction of basic materials and goods from land and sea
secondary sector
all activities in an economy that are concerned with eithher manafacturing or construction
tertiary sector
all activities in an economy that involve the idea of a service
production of goods
involves using raw materials and/or semi-finished goods to make a whole good
production of services
process of providing a service to a consumer
factor market
market in which the services of the factors of production are bought and sold
derived demand
demand for the factors of production
product market
market in which final goods or services are offered to consumers, business and the public sector for sale
division of labour
where workers specialise in, or concentrate on, one area of the production process
specialisation
the process by which individuals, firms, regions and whole economies concentrate on producing those products that they are best at producing
exchange
the giving up of something that the individual or firm has, in return for something you wish but do not have
demand
the willingness and ability to purchase a good or service at the given price in a given time period
effective demand
shows how much would be bought at any price
individual demand curve
demand for a good or service by an individual consumer
market demand
total demand for a good or service in a given time period
supply
willingness and ability of a producer to make and sell a good/service ata given price at a given point in time
individual supply
the supply of one individual firm
market supply
total supply of a specific good or service. This is found by adding together all the individual producers’ supply
subsidy
a grant given by the government for a producer to produce something
price
sum of money you have to pay for a good or service. It is usually determined by the interaction of supply and demand
worth
how much you value something. This canvary from person to person and is subjective
cost
how much a producer spends to provide a good or service
market equilibrium
a situation in which the quantity of a good or service equals the quantity demanded by consumers
excess demand + excess supply
tells us that the market is in disequilibrium and prices should either increase or decrease
efficiency
the optimal production and sitribution of scarce resources
market forces
factors that determine price levels and the availability of goods and services in an economy without government intervention
elasticity
measures the sensitivity of one variable to a given change in another variable
PED
trsposiveness of quantity demanded to a given change in price at a particular time
elastic demand
when the percentage change in quantity demanded is greater than the percentage change in price. Values from -1 to -infinity
inelastic demand
when the percentage change in quantity demanded is less than the percentage change in price. Values from 0 and -1
PES
resposiveness of quantity supplied to a change in the price of the product
