The Role of Markets and Money Key Terms (Micro) Flashcards
Market
A way of bringing together buyers and sellers to buy and sell goods and services
Market Economy
An economy in which scarce resources are allocated by the market forces of supply and demand
Primary Sector
The direct use and/or extraction of natural resources (fishing, mining, etc.)
Secondary Sector
The manufacturing and construction of products
Tertiary Sector
The provision of a service (teaching, selling cars, etc)
Factor Market
A market where the services of the factors of production are bought and sold
Product Market
A market where final goods or services are bought and sold
Exchange
Giving up something that the firm or individual has in return for something that they do not have but wish to possess
Specialisation
When firms, countries, etc., concentrate on producing the products that they are the best at producing
Division of Labour
When workers specialise in one area of the production process
Demand
The willingness and ability to purchase goods or services at the given price in a given time period
Law of Demand
The quantity demanded varies with a change in price (ex. as price increases, quantity decreases)
Movement Along the Demand Curve
Only occurs with a change in price
Shift of the Demand Curve
Only occurs with non-price factors
Subsidy
An amount of money the government gives to firms to encourage production and consumption
