Definitions Flashcards
(19 cards)
Market Economy
economy that solves the BEP in a network of separate by interconnected markets
Basic Economic Problem
- limited goods but unlimited wants
2. choices must be made
Invisible Hand
- consumers and producers changing level of demand and supply to create meeting point of price and demand
- how markets function
Tangible commodity
goods (physical)
Intangible commodity
services (provided but no physical form)
Price takers
- individual/organisation that take prices that’s developed by market forces
- cannot control price
Homogeneous products
- All the products being sold are the same
2. cannot be differentiated
Product markets
deal in the buying and selling of goods and services
Factor markets
deal in the buying and selling of factors of production
Market
reference to a particular segment of the economy that sells the same type of product(s)
Demand
The quantity of a good or service that a consumer is willing and able to buy at a particular price and at a particular point in time
Schedule
table of information used to create demand/supply curve
Curve
demand/supply curve is graph that depicts table
Movement along curve
due to price
Shift in curve
due to non-price factors
Derived demand
demand for a resource of intermediate good depends on the level of demand for another immediate or final good
Composite demand
products that have multiple uses have composite demand
Supply
quantity of goods and services that producers are willing and able to sell at each price point and at a particular point in time
Price Mechanism
process by which the forces of demand and supply interact to determine the price of a good or service
