section 2: allocation of resources Flashcards
memorize definitons
microeconomics
the study of individual market
Macroeconomics
the study of the whole economy
Market
place where buyers and sellers meet to…
resource allocation/allocation of resources
the way in which economies decide the 3 w’s
3 economic questions
what to produce, how to produce, whom to produce to
Economic systems
institutions, organisations and mechanisms that influence economic behaviour and determine how resources are allocated
Planned economic system
an economic system where the government makes the crucial decisions, land and capital are state-owned and directives allocate resources
Mixed economic system
an economy in which both the private and public sectors play an important role
market economic system
consumers determine what is being produced and resources are allocated by the price mechanism
Price mechanism
the way the decisions made by households and firms interact to decide the allocation of resources
Market equilibrium/ disequilibrium opposite
is where demand and supply meet/are equal.
not equal, and either a surplus or shortage.
