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Business Functions > Economics Prep > Flashcards

Economics Prep Flashcards

1
Q

Define what a Market is

A

A Place or situation where buyers and sellers meet to exchange goods.

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2
Q

Define Market Forces

A

changing producers supply or consumers demand which brings change to price and quantity in a market

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3
Q

Increase in demand causes the demand curve to move to the

A

Right

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4
Q

decrease in demand causes the supply curve to move to the

A

Left

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5
Q

What are the determinants affecting supply

A

Price of goods
Costs of production
Price of “related” goods
change in technology

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6
Q

Increase in Supply cause the supply curve to move to the

A

Right

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7
Q

Decrease in supply causes the supply curve to move to the

A

Left

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8
Q

What is Elasticity

A

The measure of responsiveness of quantity demanded to a given change in price

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9
Q

Describe Elastic Proportions

A

the Quantity demand changes proportionately MORE than the change in price

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10
Q

Describe Inelastic Proportions

A

the Quantity demand changes proportionately LESS than the change in price

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11
Q

what are the Determinants of demand elasticity?

A

Availability of substitutes
Necessity vs Luxury
Costs of Good
Frequency of price changes

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12
Q

what is the relationship between price and revenue with Elastic Demand?

A

increase in price decreases revenue

decrease in price increases revenue

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13
Q

what is the relationship between Price and Revenue in Inelastic Demand?

A

increase in price increases revenue

decrease in price decreases revenue

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14
Q

Define Demand

A

The quantity or amount of good or service that an individual or household is willing and able to purchase at various prices

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15
Q

Individual demand

A

the demand of one individual consumer or household

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16
Q

Market demand

A

the combined total quantity demanded by ALL consumers of a good or service

17
Q

Aggregate demand

A

the total combined demand for all final goods and services in an economy

18
Q

what is a demand curve

A

a graph of the relationship between price and quantity demanded - SLOPES DOWN

19
Q

What are the determinants of Demand?

A

Tastes and preferences
income changes
PRICE of substitute products
PRICE of complementary products

20
Q

what is a free market?

A

a market not influenced by government intervention - where markets are left to establish a price and quantity

21
Q

what is a government intervention market

A

where the government must intervene in markets to correct market failures

22
Q

what is market equilibrium

A

the market price is where the quantity supplied is equal to the quantity demanded

23
Q

Productivity

A

the measure of how efficiently we are using our resources

24
Q

The process of Productvity

A

Inputs - transformation - outputs

25
Q

Resources of Productivity is defined as

A

Land, Labour, Capital and Enterprise

26
Q
A

Business Functions (2 decks)

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