Markets + Allocation of resources Flashcards
1
Q
What is a market?
A
A market is an opportunity for buyers and sellers to meet and determine the price of
a good or service.
2
Q
What is a Factor market?
A
This is a market for factors of production (land, labour, capital and enterprise).
E.G a livestock market may trade in sheep or cows.
3
Q
What is a Product market?
A
This is a market concentrating on the sale of the final product or service.
E.G If you wished to purchase a burger you may go to McDonald’s or Burger King.
E.G If you wished to purchase a fence panel you may go to a DIY store or a timber merchant.
4
Q
What is the role of markets in allocating resources?
A
Markets use prices as signals to allocate resources to their highest valued uses
