Economic Market Flashcards
Define consumer:
A consumer is a person or a group that are the final users of goods and services.
Define living standards:
Livings standards are a measure of a person’s quality of life, and their ability to afford goods and services.
Define GDP:
GDP stands for Gross Domestic Product, and is the total value of goods and services produced within an economy. It indicates the wealth of a country.
What are the 3 economic questions? Provide an example for each.
- what to produce?
(clothing VS electronics) - how to produce?
(Machinery VS manual labour) - for whom to produce?
(Adolescents VS senior citizens)
What are the 4 factors of production? Provide examples for each.
- Land: any natural resource
(Water, trees, animals) - Labour: any human service
(Intellectual talent, physical strength) - Capital: anything manufactured
(Machinery, equipment, tools) - Enterprise: ability to recognise profit opportunity
(Innovation, research, development)
When is demand likely to increase and decrease?
a) Demand will increase when price decreases.
⬆️ demand = ⬇️ price
b) Demand will decrease when price increases.
⬇ demand = ⬆️ price
When is supply likely to increase and decrease?
a) Supply is likely to increase when demand increases.
⬆️ supply = ⬆️ demand
b) Supply decreases when demand decreases.
⬇️ supply = ⬇️ demand
When is price likely to increase and decrease?
a) Price will increase when demand increases.
⬆️ price = ⬆️ demand.
b) Price will decrease when demand increases.
⬇️ price = ⬇️ demand
Define producer:
A producer is a business involved in the production of goods and services. They are the “supply” side of the economy.
What role do competitors play in influencing demand and supply of consumer goods?
If business A is in competition with business B:
- High demand for Business A’s products = lower demand and supply of Business B’s products
- Low demand for Business A’s products = higher demand and supply of Business B’s products.
What is the equilibrium point, and why it it important?
The equilibrium point is the price at which consumers are willing to buy, and producers are willing to sell. It is important for the supplier to achieve this, because it means that there is no surplus of goods.
What is opportunity cost? Give an example.
The opportunity cost is the value of the next best alternative that is forgone whenever a choice is made.
Eg: seeing a movie when you could have gone to a concert … The concert is the opportunity cost.
What is the economic problem? How does this link to scarcity?
The economic problem is how to satisfy unlimited wants and needs with limited resources. If resources are scarce, they cannot satisfy the unlimited wants and needs of the consumer.
