Theme 1 - How market works Flashcards
1
Q
What is a market
A
Where consumers and producers exchange goods and services
2
Q
What is the aim of consumers
A
Consumers aim to maximize their utility
3
Q
What is the aim of producers/firms
A
Producers/firms aim to maximize their profit
4
Q
What is utility
A
Utility is the total satisfaction from consuming a good or service
5
Q
What is a rational decisions
A
Is where consumers allocate their expenditure on goods and services to maximize utility, and producers allocate their resources to maximize profits
6
Q
What is demand
A
The quantity of a good or service purchased at a given price over a given time period
7
Q
What does the demand curve show
A
It shows the quantity of a good/service that would be bought
