Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Economics > 1.3 > Flashcards

1.3 Flashcards

(72 cards)

Start Studying
1
Q

what are movements along the demand curve?

A

a change in the quantity demanded caused by price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what causes shifts in the demand curve? PIRATES

A

population
income
related/complement goods
advertising
tastes and fashions
expectations
seasons

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what is effective demand?

A

the willingness and ability to buy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is consumer sovereignty?

A

when consumers decide how resources are used as they decide what to buy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is the invisible hand?

A

a greater demand leading to an incentive for firms to produce more, in order to meet that demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what is ceteris paribus?

A

other things being equal, assuming other variables remain unchanged

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what is supply?

A

the amount offered for sale at each given price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what causes shifts in supply? CLTTC

A

costs of production
lack of materials
technology
tax and subsidies
change in objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is a subsidy?

A

a grant from the government to a firm to increase supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

how do you calculate total cost?

A

size of subsidy x quantity sold

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what is the market equilibrium price?

A

where demand equals supply aka the market clearing price all buyers and sellers are happy with the price therefore the market can be cleared

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what needs to happen when there is excess of supply and why?

A

need to lower prices as it is above the equilibrium price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what needs to happen when there is excess of demand and why?

A

need to increase prices as it is below the equilibrium price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what do market forces always do?

A

push to equilibrium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what does a shift in demand mean for the supply curve?

A

a movement along

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what does a shift in supply mean for the demand curve?

A

a movement along

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what are limitations of price determination?

A

it only looks at competitive markets
ceteris paribus: in the real economy other variables change too
information tends to be asymmetric so consumers don’t have full information regarding products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what is the fallacy of composition?

A

when an economist infers that something is true for the whole economy from information derived from a part of it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what is the price mechanism?

A

the way decisions of consumers and firms interact to determine the allocation of scarce resources between competing uses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what are the 3 functions the price mechanism plays in a market?

A

signalling
incentive
rationing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is the signalling function?

A

when price changes send contrasting messages to consumers/producers about whether to enter/leave a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what do rising prices mean in regards to the signalling function?

A

they give a negative message to consumers to leave while sending producers a positive message to enter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what do falling prices mean in regards to the signalling function?

A

they give a positive message to consumers to enter while sending producers a negative message to leave

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

what is the incentive function?

A

when higher prices provide an incentive to existing producers to supply more because they provide the possibility of more revenue and increased profits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
what does the incentive function mean for consumers?
they may think about value more
26
what is the rationing function?
when resources are scarce, demand exceeds supply and prices are driven up, it discourages demand to conserve resources.
27
what does a greater scarcity mean in regards to the rationing function?
a higher price and therefore a greater rationing, this function being associated with a contraction of demand.
28
what are the assumptions within the price mechanism?
competition exists consumers act rationally ceteris paribus no reference to income distribution
29
what is a mass market?
the largest group of consumers for a product
30
what is a niche market?
a smaller market where a specific product is focused on
31
what can the price mechanism do?
allocate resources to where they're needed and wanted
32
what does potential market growth mean?
markets and economies aren't static some niche markets may become mass changes can be made in technology leading to creative destruction
33
what does market research require?
starting a new enterprise or launching a new product involving significant upfront costs aka sunk costs
34
what are examples of market research?
product testing and development investment in equipment and machinery initial marketing
35
what will firms do to minimise risk?
attempt to gather as much information as possible so that the idea is profitable in the long term
36
what is the purpose of market research?
to quantify potential demand understanding how much consumers are willing to pay understand consumer behaviour study competitors
37
what are the 2 types of market research?
primary/field secondary/desk
38
what is primary/field market research?
first hand up to date relevant information
39
what is secondary/desk market research?
second hand already gathered and published information
40
what are the 2 types of data?
quantitative qualitative
41
what is quantitative data?
number based data from closed questions
42
what is qualitative data?
opinion/feeling based data from open questions
43
what are the 2 types of product development?
product orientation market orientation
44
what is product orientation?
a way to create and develop a technically impressive product then sell/convince to consumers it's what they want product testing led push factors
45
what is market orientation?
concentrating on consumer preferences meeting needs and wants more closely market research led pull factors
46
what are the 4 types of sampling?
random quota stratified
47
rank the types of sampling from most accurate and least bias to least
random quota stratified
48
what is random sampling?
where everyone has an equal chance of being selected
49
what is quota sampling?
dividing the target market into groups then a % are selected
50
what is stratified sampling?
dividing the target market int groups and selecting randomly
51
what is bias?
when information collected doesn't accurately reflect the population
52
what is segmentation?
identifying different groups of consumers based on needs, wants,preferences and habits
53
list 9 methods of market research?
questionnaires focus group observations test marketing interviews market reports government data internet trade publications
54
explain and evaluate questionnaires.
a primary (quantitative,qualitative) method asking people a pre-planned set of open or closed questions + can ask very detailed questions + relevant to the firm - time consuming - expensive
55
explain and evaluate focus groups.
a primary (qualitative) method organising a group discussion on a topic led by the researcher + having relevant data + varied of answers - specialists can be expensive - time consuming
56
explain and evaluate observations.
a primary (qualitative, quantitative) method watching and studying the actions of consumers, suppliers and rivals + quick and simple + cheaper - only collecting data from one area is quick - reliant on accurate research
57
explain and evaluate test marketing.
primary (qualitative, sometimes quantitative) launching a product in a small area and evaluating the response to it + relevant feedback + no cost of national launch if poor results - costs of production - usually tested on a smaller market
58
explain and evaluate interviews.
primary (qualitative) asking one on one questions on the topic led by the researcher + ability to ask follow up questions + in depth responses - smaller sample - costly and time consuming
59
explain and evaluate market reports.
secondary (quantitative) organisations e.g. Mintel producing reports on trends in the market that are sold to firms + easy to access + reliable/accurate - have to pay organisations e.g. Mintel - not always relevant to firms now
60
explain and evaluate government data.
secondary (quantitative) national and local government providing data on population demographics + larger samples + range of available data topics - may be out of date - not specific to individual firms
61
explain and evaluate the internet
secondary (quantitative, qualitative) search engines offering data on competitors in the relevant market + easy to access + free to access - not always reliable and accurate - not specific to individual firms
62
explain and evaluate trade publications.
secondary (quantitative) specialist magazines reporting on market trends + specific to an industry + easy to access/quick - not specific to individual firm - rivals have access too
63
what is market mapping?
a way to identify the market positioning of your main rivals
64
positives of market mapping.
helps to spot gaps in the market useful for analysing competitors
65
negatives of market mapping
the 'gap' doesn't mean demand and there is no guarantee of success
66
what is product differentiation?
the extent to which consumers perceive a brand to be different e.g. function, design, quality, image
67
what is competitive pricing?
when costs need to be kept low as the margins are 'tight'; because products are homogeneous there is little choice on price
68
what does competitive pricing mean in a stable market?
there is no fluctuation in supply and demand, therefore the price is consistent when the market is in equilibrium
69
what does competitive pricing mean in a dynamic market?
marketing has to adapt to keep up with social trends, changes in tech, competitive environment and consumer tastes; failure to keep up with trends will result in a loss of market competitiveness
70
what is adding value?
creating a finished product that is worth more to the consumer than the sum of the parts
71
what is market size?
a measure of the value of all the sales made by all the companies in a market or by volume (the quantity of sales made in a marketplace)
72
what is market growth?
the % increase in the size of the market

Economics (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions