Topic 3- Flashcards
Law of demand
As the price of an item decreases, the quantity of that item will increase. As the price increases, consumers will be less willing and able to pay and demand will increase.
Law of supply
As the price of an item increases, the quantity of that item will be supplied by producers will be less willing to supply and therefore supply will fall. (the more expensive an item is the more will be made.
Finding Equilibrium
At some point, the demand curve will cross the supply curve. which is the moment at which the quantity producers are willing to supply exactly equals the quantity consumers will purchase. There is no shortages or surpluses.
Availability of Resources
- available labour force
- New discoveries of raw materials
- Weather conditions & Natural disasters.
Cost of resources
- change in the tax rate
- change in wage rates paid to employees
- Change in cost of raw materials
Efficiency of resources
- increase for workers
- new machinery and technology
- New production methods to reduce the amount of waste.
intervene in a market
To stabilises the economy, to relocate resources and redistribute income.
Intervene on products that are undesirable
Some products are deemed to be undesirable but can be profitable for those who produce them. the government tries to relocate resources away from the production and provision of such goods and services. if the prices get higher the less likely people will buy it. (drugs)
Excise tax
An excise tax is an indirect tax- it is a tax that is paid to the government by the producer but it is passed on to the consumer as part of the price of a good or service.
Excise tax and demand
The price will increase, so the price goes up, hopefully, the demand goes down because the less amount of people will want to buy.
stakeholder
Any group or individual who has an interest in or is affected by the activities of a business or organisation. when making decisions the business or organisation needs to consider all groups or individuals who may be affected either in a positive or negative way.
Unintended consequenses
Unintended consequences are outcomes that are not the ones foreseen and intended by actions or decisions. these outcomes can be positive or negative.
Unintended consequenses for surgar tax
Two Unintended Consequences of the sugar tax are consumers stockpiling sugary drinks/ bulk buying. Other Unintended consequences are adults buying other cheaper alternatives in social situations, like buying alcohol.
Alternative perspective stakeholders sugar tax
The Australian Medical Association (AMA) is a stakeholder that is for the sugar tax. The AMA believes that sugar drinks are causing obesity and type 2 diabetes when people are drinking it. Obesity is estimated to cost the health system $5.3 billion yearly. The University of Melbourne found that the taxed on these items will lead to longer, healthier lives and save billions of money. The Beverage Industry is a stakeholder that is against the sugar tax. The beverage industry belies that there is no evidence anywhere in the world that the tax has a measurable impact on obesity rates and analysis shows it also doesn’t have an impact on what people by. Geff Parker the executive director of the beverage council found in the Uk 62% people have said it hasn’t had impact on what they buy.
Demand factor
The price will impact demand.
Preferences - change in taste and clothes
Price in a complementary product - phone and headphones
Income- how much money you’re willing to spend.
