economics 1 Flashcards
what are the economic business objectives
profit maximisation, sales maximisation, growth maximisation, satisficing , survival, social/ethical concerns
what are the factors of production
land labour capital enterprise
what is opportunity cost
the loss of other alternatives when one alternative is chosen
what does market forces mean
When the conditions of supply/demand change in
a market this is likely to lead to price changes
factors effecting demand
Changes in income, Substitutes, Complementary goods, Economy, Competition, Fashions, Seasons, Price, Demographics, Advertising
factors effecting supply
Technological changes, Subsidies, Cost of raw materials, Environmental, Taxes, Price of related goods, Price of labour/land/machinery, Number of firms in the industry
factors of choosing how to change the price mechanism
SIGNALLING FUNCTION, Price changes send contrasting messages to consumers and producers about whether to enter or
leave a market.
INCENTIVE FUNCTION, An incentive is something that motivates a producer or consumer to follow a course of action
or to change behaviour.
THE RATIONING FUNCTION, Whenever resources are particularly scarce, demand exceeds supply and prices are driven up.
The effect of such a price rise is to discourage demand and conserve resources.
what the the main two types of market research and what are they
primary, doing your own research by collecting data
seconary, using some one elses data
what are the benefits and disadvantages of each type of market research
primary can be expensive but is tailored directly to your business
secondary is usually cheaper but may not directly relate to your business
types of primary research
questionnaire, focus groups, observation, surveys
types of secondary research
company reports, census, government websites, internet, market research companies,
