2.1 the role of markets

Question 1

what is a market

Answer 1

where buyers and sellers come together to buy or sell goods

Question 2

what is a product market

Answer 2

a market where finished goods and service are offered to consumers, businesses and the public sector. NOT CONCERNED with buying or selling raw materials

Question 3

what does an effective product market do

Answer 3

ensures that consumers benefit from lower price and increase choices by increasing competition

Question 4

what is a factor market

Answer 4

services of the factors of production are bought and sold

Question 5

what is specialisation

Answer 5

where they concentrate on a particular task or producing goods and services they have an advantage on making

Question 6

what are the cost and benefits for specialisation on producers

Answer 6

benefit - higher output, higher productivity
cons - risk of a fall in demand, dependency

Question 7

pros and cons of specialisation on a region

Answer 7

benefits - efficient use of resources, created jobs for residents
cons - risk of fall in demand, resource exhaustion

Question 8

pros and cons of specialisation on workers

Answer 8

benefits - increased skill, increased standard of living
cons - boredom, risk of a fall in demand for that particular job

Question 9

what is the primary sector

Answer 9

the direct use of natural resources in an economy

Question 10

what is the secondary sector

Answer 10

all economic activity to do with manufacturing or construction

Question 11

what is the tertiary sector

Answer 11

all economic activity where a service is provided