Microeconomics Flashcards
Define economics
The study of scarcity within the economy
Define scarcity
Insufficiency of economic resources to fulfil humans demand
Define trade off
Choosing how to spend one resource between alternative uses
Opportunity cost
Value of the best alternative that must be sacrificed in doing a particular activity
What are the three economic questions
What goods and services are to be produced?
How are they to be produced?
For whom are they to be produced?
What are the facts of production
Land
Labour
Capital
Entrepreneurship
What are the four concentric zones around the central market
CBD
zone of transition
Suburban zone
Rural urban fringe
What is the CBD ?
Optimum location for shops,commerce and services
Focus of inner city transport
What’s is the zone of transition
Historically, urban residential
Currently, warehousing and wholesaling
Mix of land uses with constant change
What is the suburban zone
Moderate residential use
Large establishments are moving in eg hospitals, universities
What is the rural urban fringe
Well beyond the suburban zone
Used by people willing to commute to work in towns and cities
What is market demand
The total quantity of a good or service demanded by all potential buyers in a market
What is the Law of demand
When the price increases quantity decreases
Vice versa
What is the market demand curve
The relationship between the total quantity demanded of a good or service during a certain period of time and the price per unit
What are the factors affecting demand for construction
Price of the product Non price determinants (Population) (Price of substitutes) (Level of income) (Credit availability) (Government policy )
What is market supply
Total quantity of a good or service within a market
What is the Law of supply
If price increases so does quantity
Vice versa
What’s is the market supply curve
The relationship between the total quantity supplied in a given timer period and price per unit
What are the factors affecting Construction supply
Price of product Non price determinants (Cost of production) (Government taxes and subsidies) (Supply chain management) (Expectations about future prices)
What is a market
A set of arrangements by which buyers and sellers exchange goods and services
Name the two extreme types of market structure
Monopoly and perfect competition
Name the two in between types of market structure
Monopolistic competition and oligopoly
What are the characteristics of a construction market
Imperfectly competitive (shows some but not all features of Competitive markets ) Frequently either monopolistic co,petition or oligopoly in terms of structure
What is market equilibrium
The point at which both consumers and producers wishes are met
What are the three types of production behaviour used by firms
Profit maximisation
Law of diminishing marginal returns
Cost curves
