Markets Flashcards
What is a “means of exchange”?
A means of exchange is a method of payment for goods and services
What is a Market?
A market is a situation where potential buyers are in contact with potential sellers and there is a means of exchange.
What is barter?
Barter is the use of goods or services as a means of exchange.
What is the economic problem?
The economic problem is how to satisfy unlimited wants with only limited resources
What is opportunity cost?
Opportunity cost is the second choice when making a decision. It may have been rejected due to lack of resources or a better alternative.
What are the three basic economic questions?
The three basic economic questions are:
What to produce?
How to produce?
For whom to produce?
What is consumer sovereignty?
Consumer sovereignty is the idea that consumer is king in deciding where resources are allocated in a market economy.
What is the production process?
The production process is the actual making of the goods or provision of services.
What are economic resources?
Economic resources are the inputs required by the producer to complete the production process.
What are land resources?
Land resources refer to natural resources.
What are labour resources?
Labour resources is the person power available to work in the production process.
What are capital resources?
Capital resource is the machinery, plant and buildings made by people to assist in the manufacture of commodities and provisions of services.
What is an entrepreneur?
An entrepreneur is the name given to an individual who possesses the quality of enterprise.
What does scarcity mean?
Scarcity is the economic problem of having unlimited wants in a world with limited resources.
What is the Law of Demand?
The Law of Demand States that the consumer demand is inversely proportional to the movement in price of the product.
What are goods?
Goods are products that you can purchase and possess, such as food.
What are services?
Services is something that you can purchase but never possess, such as someone cleaning your house.
What are the Factors of Supply?
Availability of resources
Cost of resources
Efficiency in resource use
What are complementary goods?
Complementary goods are goods who’s use is associated with another goods
Printer and Ink
Doritos and Salsa
What are substitute goods?
Substitute goods are goods which, due to a change in conditions, may replace each other.
If the price of Coca-Cola were to increase, more people would purchase Pepsi.
Define Economics:
Economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth.
What are the Factors of Demand?
Price of substitutes Preferences Income Expectations (Advertising) Price of complementary products Price of the product itself
What are goods?
Goods are products that you can purchase and possess, such as food.
What are services?
Services is something that you can purchase but never possess, such as someone cleaning your house.
What is the Law of Supply?
The higher the price that can be gained for an item, the more that will be supplied and visa versa
What are complementary goods?
Complementary goods are goods who’s use is associated with another goods
Printer and Ink
Doritos and Salsa
What are substitute goods?
Substitute goods are goods which, due to a change in conditions, may replace each other.
If the price of Coca-Cola were to increase, more people would purchase Pepsi.
Define Economics:
Economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth.
What are the 3 types of resources?
Land, labour and capital
What is a need?
A necessity of survival
What is a want?
A product that make survival more comfortable and enjoyable
