2.1 The role of markets Flashcards
• explain what is meant by a market • explain the features of the primary, secondary and tertiary sectors, including the difference between the production of goods and services • explain the difference between factor and product markets, including their interdependence • evaluate the costs and benefits of specialisation and exchange in markets including for producers, workers, regions and countries (18 cards)
What does the term ‘market’ mean?
Anyway of bringing together buyers and sellers to buy and sell goods and services.
What does the term ‘market economy’ mean?
An economy in which scare resources are allocated by the market forces of supply and demand.
What does the term ‘primary sector’ mean and examples?
The direct use of natural resources, such as the extraction of basic materials and goods from land and sea, e.g. agriculture, fishing & mining.
What does the term ‘secondary sector’ mean and examples?
All activities in an economy that are concerned with either manufacturing or construction , e.g. furnishing and refining oil.
What does the term ‘tertiary sector’ mean?
All activities in an economy that involve the idea of a service
What does the term ‘product market’ mean and an example?
Market in which goods or services are offered to consumers, businesses and the public sector, e.g. food from supermarket.
What does the term ‘factor market’ mean and an example?
Market in which the services of the factor of production are bought and sold, e.g. households supply labour to firms in return for wages/ salaries.
What does the term ‘specialisation’ mean?
The process by which individuals, firms, regions and whole economies concentrate on producing those products that they are best at producing.
What does the term ‘exchange’ mean?
The giving up of something that the individual or firm has, in return for something they wish to have but do not possess.
What are the 6 benefits of specialisation for producers?
- Higher output
- Higher productivity
- Higher quality
- Bigger market
- Economies of scale
- Time saving
What are the 4 costs of specialisation for producers?
- Costs may eventually rise
- Dependency
- Failure of exchange
- Movement of workers
What does the term ‘division of labour’ mean?
Where workers specialise in, or concentrate on, one area of the production process.
What are the 3 benefits of specialisation for workers?
- Increased skill
- Natural strengths
- Increased job satisfaction
What are the 3 costs of specialisation for workers?
- Boredom
- Deskilling
- Unemployment
What are the 3 benefits of specialisation for regions?
- Efficient use of resources
- Creates jobs for residents
- Infrastructure development
What are the 3 costs of specialisation for regions?
- Risk of fall in demand
- Resource exhaustion
- Loss of advantage
What are the 5 benefits of specialisation for countries?
- Economies of scale & efficiency
- More jobs
- International trade
- Improved standard of living
- Government revenue
What are the 4 costs of specialisation for countries?
- Unemployment
- Over-dependence
- Over-exploitation of resources
- Negative externalities
