Providing goods/services Flashcards
Define opportunity cost
the sacrifice of the next best option thats been given up
Name 2 types of resources
- renewable
- non-renewable
What is a renewable resource
a resource that can be replenished
What is a non-renewable resource
a resource that cannot be replenished
What are the three sectors of the economy?
- primary
- secondary
- tertiary
What happens in the primary sector?
raw materials are extracted from the Earth e.g coal or fish
What happens in the secondary sector?
raw materials are taken and turned into finished goods/services
What happens in the tertiary sector?
this involves providing services to consumers
What is a good?
an item that can be manufactured and sold
What is a service?
intangible goods that people can consume
What is a market?
a place where buyers and sellers can trage goods
What is a product market?
a place where goods/services can be bought and sold
what happens to the price of a product if the demand rises in a product market
the price of the product rises
Give 2 examples of a product market
- supermarket
- amazon
What is a factor market?
a place where the factors of production are bought and sold
Give 2 examples of a factor market
- labour market
- capital market
What increases demand in the factor market?
demand for the product they produce
What are 3 benefits of the product market?
- firms can develop a degree of brand loyalty
- concentration on product markets allows small firms to benefit from economies of scale
- prices are determined by demand and supply which avoids misallocation of resources
What are 4 limitations of the product markets?
- firms can gain monopoly power
- some products may be harmful
- can create social costs e.g driving creates polution
- inequality regarding price
