Topic 2-Resource Allocation Flashcards
Market
A market is an opportunity for buyers and sellers to meet an determine the price of a good or service
The role of markets In determining allocation of resources
matching buyer to product
The function of price
-Rationing
-Signalling
-Incentive
Factor market
The market for the factors of production
Product market
The market in which a consumer purchases a product
Products
Tangible Physical objects that can be measured or weighed
Services
An Intangible action
Primary sector
This any part of the sector that is involved with acquiring the land economic resources
Secondary sector
This is any part of the economy that is involved with the assembly or manufacturing process of products
Tertiary sector
This is any part of the economy that is involved in the provision of services that support the primary and secondary sectors. (stores)
Specialisation
The concentration of resources of a business on the most efficient products or services
Gains from specialisation
Higher output: total production of goods and services is raised and quality can be improved
Variety: consumers have access to a greater variety of higher quality products
Lower prices: increased competition acts as an incentive to minimise costs and keep prices down
Division of Labour
Allowing workers to specialise in a specific task as an oppose to many
Advantages of division of Labour:
-Workers become more competent (output increases)
-the employer is more able to afford specific training for individuals as output will justify investment
-workers can repeatedly use a single tool making it more cost effective
Division of labour disadvantages
-Workers may become bored due to repetitively doing the same task
Lower levels of output and and quality of production due to low morale
-increased staff turnover
-an increase in mass-produced standardised foods may reduce choice for consumers
