ECO TEST 1

studied byStudied by 0 People
0.0(0)
get a hint
hint

factor markets

1/245

Tags & Description

Studying Progress

New cards
245
Still learning
0
Almost done
0
Mastered
0
245 Terms
New cards

factor markets

where factors of production are bought and sold

New cards
New cards

product markets

where produced good and services are bought and sold

New cards
New cards

demand

the quantity that consumers are ready

New cards
New cards

contraction of demand

price increase

New cards
New cards

expansion in demand

price decrease

New cards
New cards

individual demand

the demand of an individual consumer

New cards
New cards

market demand

the demand of all consumers

New cards
New cards

demand curve describe

y - price x- quantiy -m

New cards
New cards

supply

the quantity that producers are ready

New cards
New cards

supply expansion

price increases

New cards
New cards

supply contraction

price decreases

New cards
New cards

individual supply

the supply of an individual business

New cards
New cards

market supply

the supply of all producers

New cards
New cards

supply curve description

y- price x- quanity m

New cards
New cards

expansion and contraction impact on line

move up and down along line

New cards
New cards

law of demand

as price increases quantity demanded decreases

New cards
New cards

6 non price change on demand

changes in income

New cards
New cards

why might changes in expected future prices impact demand

expectations of future price rise increases demand for the good today as consumers seek to purchase before price rise

New cards
New cards

law of supply

as price increases the quanity supplied increases

New cards
New cards

impact of non price changes on supply

changes in number of suppliers

New cards
New cards

explain changes in number of suppliers

an increase in the number of suppliers increases supply as market supply increases (right shift)

New cards
New cards

explain changes in cost of factors of production

increasing cost of production will decrease supply

New cards
New cards

explain changes in technology

may increase productivity reducing costs of production thereby increasing supply

New cards
New cards

changes in expected future prices

expectations of future price rises decrease supply as suppliers hold the good and supply at a later date

New cards
New cards

changes in prices of other goods

producers may switch to producing the other good whose price has increased decreasing the supply of the first good

New cards
New cards

when does price elasticity of demand matter

businesses setting prices

New cards
New cards

price elasticity of demand

how responsive quantity demanded is to change in price

New cards
New cards

TCO

revenue

New cards
New cards

increase TCO

price inelastic

New cards
New cards

No change TCO

unit elastic demand

New cards
New cards

decrease TCO

price elastic demand

New cards
New cards

price inelastic examples

petrol

New cards
New cards

price elastic examples

luxury goods

New cards
New cards

price elasticity of supply

how responsive quantity supplied is to a change in price

New cards
New cards

factors influencing price elasticity of demand

luxury or necessity

New cards
New cards

explain length of time since price increase

longer time since the price increase tends to be more price elastic demand (find alternatives after a while)

New cards
New cards

explain proportion of income spent on good

if it is a bigger part of income than you are more likely to care about the price

New cards
New cards

factors affecting price elasticity of supply

length of time since price increase, ability to store inventory, excess capacity

New cards
New cards

explain length of time since price increase (supply)

the longer time since the price change the more price elastic

New cards
New cards

explain ability to store stock

books vs flowers

New cards
New cards

explain excess production capacity

if a business has excess production capacity they will be able to increase supply in response to a price increase

New cards
New cards

perfectly elastic demand graph

horizontal line (apple stall) - demand for a good is infinitely responsive to a change in price

New cards
New cards

perfectly price inelastic demand graph

vertical line (life saving dosage) demand for a good does not change in response to a change in price

New cards
New cards

perfectly price elastic supply

horizontal line - where supply of a good is infinitely responsive to a change in price

New cards
New cards

perfectly price inelastic supply

vertical line - where supply of a good does not change in a response to a change in price (mona lisa)

New cards
New cards

demand for labour

the quantity of labour that businesses are ready

New cards
New cards

labour graphs

y - price of labour x - quantity (hours)

New cards
New cards

supply of labour

the quantity of labour that individuals are ready

New cards
New cards

non price changes that impact on demand for labour

changes in output of firm

New cards
New cards

explain changes in output of firm

increasing production will result in increased demand for labour

New cards
New cards

explain cost of other inputs

decreasing costs of other inputs will results in decreased demand for labour eg. technology

New cards
New cards

non price changes impact on supply of labour

changes in working conditions

New cards
New cards

explain changes in working conditions

improved working conditions means more people are willing to work and therefore more labour

New cards
New cards

explain occupational mobility

as it is easier for people to transition between jobs then there will be an increased supply of labour

New cards
New cards

explain geographic mobility

ease of moving between locations in the same occupation

New cards
New cards

what 3 things is demand for labour dependent on

level of economic growth in economy

New cards
New cards

Aggregate Demand Formula (all of the demand for goods and services)

C+I+G+(X-M)

New cards
New cards

Aggregate Supply Formula (all of the supply of goods and services)

C+S+T

New cards
New cards

participation rate formula

labour force + seeking work/ population over 15

New cards
New cards

reasons for changes in participation rate

population ages

New cards
New cards

define workforce

working age population that are either working one hour per week or actively seeking work

New cards
New cards

aus workforce stats (Sep 2022)

13.6 m employed

New cards
New cards

structure of an economy

the proportion of total GDP in the economy contributed by each industry sector

New cards
New cards

industry share of australian output trends

significant decline in manufacturing

New cards
New cards

employment by industry trends

agriculture long term decline

New cards
New cards

unemployment rate

unemployed/employed+unemployed

New cards
New cards

types of unemployment

cyclical

New cards
New cards

explain cyclical unemployment

a period of decline in the business cycle

New cards
New cards

explain structural employment

unemployment as result of mismatch between skills workers have and skills businesses demand

New cards
New cards

Explain frictional unemployment

when workers are between jobs - switching

New cards
New cards

explain seasonal unemployment

occurs at certain times of year eg. industries where not needed all year around (fruitpickers) or where unemployment increases same time every year (uni graduation)

New cards
New cards

explain underemployment

workers are employments but want to work more hours

New cards
New cards

explain hidden unemployment

unemployment that occurs because workers have become discouraged in the labour market hand have given up actively seeking work

New cards
New cards

explain long term unemployment

unemployed for more than 12 months

New cards
New cards

explain trends in the unemployment rate

cyclical

New cards
New cards

trends in the underemployment rate

over 1 million employed workers desire more hours of work although significantly declined since COVID peak

New cards
New cards

trends in part and full time employment

significantly more jobs have been created as part time rather than full time jobs and part time jobs now represents more than 30% of jobs in the economy. This is called the casualisation of the Australian workforce -reduction of full time share of total employment and increase in part time and casual employment. Although in 2021 part time employment proportionally decreased as a share of total employment

New cards
New cards

casual employment

where a worker is not guaranteed a number of hours a week and where the hourly wage rate is typically higher to compensate the worker

New cards
New cards

adv of casualisation for ind

flexibility in hours to balance family commitments and work life balance

New cards
New cards

disadv of casualisation for ind

less job security and income certainty

New cards
New cards

adv of casualisation for bus

reduction in employment costs - only engage workers when required

New cards
New cards

disadv of casualisation for bus

higher hourly rate paid

New cards
New cards

what do businesses do to reduce costs

outsourcing

New cards
New cards

explain outsourcing

contracting a non core activity formerly performed by the business to a third party organisation eg. qantas outsourcing food production

New cards