MarketSystemIGCSE Flashcards

1
Q

Exporters

A

Firms that sell overseas

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2
Q

Price

A

The amount of money that goods or services are exchanged for in a transaction

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3
Q

Market

A

A set of arrangements allowing buyers and sellers to communicate and exchange goods and services

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4
Q

Demand

A

the quantity of a good or service individuals are willing to purchase at various prices and it Depends on individuals’ needs and wants as well as their income

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5
Q

Price Mechanism

A

The system in a market economy whereby changes in price in response to changes in demand and supply have the effect of making demand equal to supply.

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6
Q

Demand Curve

A

A graph of the relationship between the price of a good and the quantity demanded.

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7
Q

Effective Demand

A

Demand supported by the ability to pay for a good or service

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8
Q

Inverse Relationship

A

The relationship between two variables that change in opposite directions for example: product price and quantity demanded.

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9
Q

Complementary Goods

A

Products and services that are used together. When the price of one falls the demand for the other increases (and conversely).

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10
Q

Inferior Goods

A

Goods for which demand tends to fall when ‘income’ rises.

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11
Q

Normal Goods

A

Goods for which demand goes up when income is higher and for which demand goes down when income is lower.

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12
Q

Substitute Goods

A

goods that can be used to replace the purchase of similar goods when prices rise

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13
Q

Shift in the demand curve

A

a movement to the left or tight of the entire demand curve when there is a change in any factor affecting demand except the price

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14
Q

Supply Curve

A

A graph illustrating how much of a product a firm will sell at different prices.

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15
Q

Advalorem Tax

A

A tax levied as a percentage of the price of a good

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16
Q

Indirect Taxes

A

Taxes imposed by the government on spending

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17
Q

Subsidy

A

A government payment that supports a business or market

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18
Q

Equilibrium Price

A

the price that balances quantity supplied and quantity demanded

19
Q

Excess Demand

A

when quantity demanded is more than quantity supplied

20
Q

Excess Supply

A

when quantity supplied is more than quantity demanded

21
Q

Market Clearing Price

A

Price where the amount supplied in a market matches exactly the amount demanded.

22
Q

Total Revenue

A

Price x Quantity; the total amount of money a firm receives by selling goods or services

23
Q

Elastic Demand

A

A situation in which consumer demand is sensitive to changes in price.

24
Q

Inelastic Demand

A

A situation in which an increase or a decrease in price will not significantly affect demand for the product.

25
Price Elasticity of Demand
A measure of how responsive demand for a product is to changes in price
26
Factors of Production
Land Labor Capital Entrepreneurship
27
Land
One of the factors of production. Natural factors needed to produce including the land used and all raw materials
28
Labour
One of the factors of production - workers
29
Capital
One of the factors of production. Man made factors needed to produce including buildings machinary money
30
Entreprenuership
One of the factors of production. Creatively combining natural resources human labor and capital in unique ways to develop new and and useful goods and services
31
Scarcity
A situation in which unlimited wants exceed the limited resources available to fulfill those wants
32
Basic Economic Problem
Allocation of a nation's scarce resources between competing uses that represent infinite wants
33
Choice
Decision made or course of action taken when faced with a set of alternatives.
34
Needs
Items necessary for existence such as clothing food and shelter.
35
Wants
Goods that are purchased to add comfort or pleasure to life
36
Opportunity Cost
Cost of the next best alternative use of money time or resources when one choice is made rather than another
37
Unitary elasticity
A situation in which total revenue remains the same when prices change. (PED = 1)
38
Perfectly Elastic
In this special case the demand curve is horizontal meaning consumers have an instantaneous & infinite response to a change in price
39
Perfectly Inelastic
When buyers are completely unresponsive to a change in price. When the calculated elasticity is 0
40
Economics
study of how people and societies use limited resources to satisfy unlimited wants; the management of scarcity and choice
41
Surplus
A situation in which quantity supplied is greater than quantity demanded (also excess supply)
42
Shortage
A situation in which quantity demanded is greater than quantity supplied (also excess demand)
43
Services
Actions or activities that one person performs for another
44
Supply
How much of a good or service a producer is willing and able to produce at different prices.