1
Q
What is a market?
A
Any place which brings buyers and sellers together.
They can be physical (e.g. Waterstones) or virtual (e.g. eBay)
2
Q
How is price determined in the market?
A
- Buyers agree the price by purchasing the good/service.
- If they do not agree on the price then they do not purchase the good/service.
This encourages sellers to adjust their prices until an equilibrium price is reached.
3
Q
At the equilibrium price, what happens?
A
Demand = Supply
At this point the price is called the market clearing price. This is the price at which demand of buyers equals the supply of sellers in the market.
Theme 1
flashcards
Decks in class (29)
# Cards
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1.1.1 Introduction to economics16
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1.1.2 The basic economic problem21
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1.1.3 Factors of production12
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1.1.5 Production Possibility Frontiers (PPF)23
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1.1.6 Free market economies, mixed economy and command economy20
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1.1.7 Specialisation and the division of labour25
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1.2.1 Behavioural economics and rational decision making13
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1.2.2 The Demand Curve19
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1.2.3 Price, income and cross elasticities of demand37
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1.2.4 The Supply Curve17
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1.2.5 Price elasticity of supply19
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1.2.6 Price determination3
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1.2.7 Price mechanism15
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1.2.8 Consumer and producer surplus14
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1.3.1 Types of market failure5
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1.3.2 Externalities19
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1.3.3 Merit and demerit goods9
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1.3.4 Public goods11
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1.3.4 Imperfect information7
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1.4.1 Taxation21
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1.4.2 Subsidies7
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1.4.3 Maximum and minimum prices14
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1.4.4 State provision of goods and privatisation10
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1.4.5 Regulation11
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1.4.6 Provision of information9
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1.4.7 Other forms of government intervention13
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1.4.8 Government failure15
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behavioural economics'27
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Micro Examples for literally everything (A* Content)80
