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Economics B : Theme 1 > 1.3.1 - 1.3.6 > Flashcards

1.3.1 - 1.3.6 Flashcards

1
Q

Effective demand

A

The willingness and ability to buy a product

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2
Q

Consumer sovereignty

A

The consumer is king

The consumer will buy what the consumer wants

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3
Q

Tastes

A

The desires of the consumers

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4
Q

Advertising and branding

A

The process of making the public aware of a particular brand

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5
Q

Substitutes

A

Replacing a component for … Benefits
Financial
Efficient
Environmental

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6
Q

Complementary goods

A

A product that gives an extra incentive to buy another product

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7
Q

Income

A

Amount earned in one working year by an individual or business

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8
Q

Population

A

General public

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9
Q

Price

A

Amount of money that a business is selling a product for

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10
Q

Demand schedule

A

Estimation of demand that a certain product gets

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11
Q

Demand curve

A 
Represented as a graph (Supply Vs Demand)
| \                           /
|   \                       /
|     \                   /--------------Supply
|       \               /
|         \           /
|           \       /
|             \   /
|               X----------------------Equilibrium
|             /   \
|           /       \-------------------Demand
|         /           \
|       /               \
|     /                   \
|   /                       \
| /                           \
L\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
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12
Q

Contraction of demand

A

When the price of the product rises,

The demand will be reduced because the market is more niche

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13
Q

Extensions of demand

A

Demand for a good or service increases

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14
Q

Shift in demand curve

A

Supply shifts to the left of the original curve

Unchanged = Equilibrium

Increased demand

Decreased demand

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15
Q

Supply curve

A

The amount of supply that is needed to reach market equilibrium

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16
Q

Short run

A

Short term solutions

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17
Q

Long run

A

Long term solutions

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18
Q

Excess supply

A

Too much of a product
(Price need to be reduced)
(Decreased production)

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19
Q

Excess demand

A

Too many people want a product
(Increase cost)
(Increase supply)

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20
Q

Market clearing

A

Equilibrium price where supply is the same or outweighed by demand

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21
Q

Profit signalling mechanism

A

Potential profits directing entrepreneurs to gaps in the market

22
Q

Ceteris Parabis

A

The assumption that all variables stay the same other than the one being studied

23
Q

Price mechanism functions

A

An economic model that helps to explain the allocation of resources between different possible uses. It shows how the “invisible hand” guides resources towards production of what customers will buy

24
Q

Signalling

A

Prices give signals to the producers and consumers

25
Q

Rationing

A

Only those willing and able to pay the price get the products/resources

26
Q

Incentives

A

‘Probability’ motives firms

‘Value for money’ motivates consumers

27
Q

Economic models

A

Used simplified assumptions to describe economic relationships.
These allow us to isolate individual changes and analyse their consequences, avoiding the complications that occur when several things are changed at once.

28
Q

Allocation of resources

A

The way in which economic agents take decisions about what to buy, what to produce and how best to use the land available land/labour/capital

29
Q

Differentiated product

A

Products appear distinctive to increase sales and increase price in time

30
Q

Mass markets

A

Competitive markets

31
Q

Oligopoly

A

A few large, dominating firms and lots of other smaller firms within a market

32
Q

Market power

A

When a company differentiates a product so they can control price and amount produced

33
Q

Niche market

A

Small market segment with specific requirements

34
Q

Market research

A

Researching a market to determine the likelihood of success

35
Q

Primary market research

A

Fieldwork:

Researching the market yourself

36
Q

Secondary market research

A

Pre-existing research about other businesses

37
Q

Quantitative market research

A

Focussing on factual data within a market

38
Q

Qualitative market research

A

Focussing on opinions of consumers within a market

39
Q

Sampling

A

Asking people for their opinions using surveys and questionnaires

40
Q

Bias

A

Opinions that do not accurately represent the consumers as a whole

41
Q

Random sample

A

Researching randomly while specifically asking certain questions

42
Q

Quota sample

A

Results of a different individuals reflect population opinions as a whole

43
Q

Stratified samples

A

Similar to the quota sample but more accurate because it focuses results

44
Q

Market segmentation

A

Splitting a market up to determine who the more likely consumer will be

45
Q

Market positioning

A

Using the product and likely consumers to determine the segment of the market to aim for

46
Q

Repositioning

A

Where a product loses its attraction in the target market/wants to expand into a larger market segment

47
Q

Market map

A

Plotting key product features on a diagram

48
Q

Competitive advantage

A

Using the ‘Market Map’ and positioning to combine features of rival company products to find a gap in the market

49
Q

Product differentiation

A

Developing a unique product to entice consumers

Unique image/USP

50
Q

Competitive pricing

A

Researching other products to set a similar price to competitors to reach higher profit margins

Economics B : Theme 1 (6 decks)

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