Economics - The Role of Markets Flashcards
Specialisation
The process whereby individuals, firms, regions or countries focus on producing what they are best at.
What’s the difference between price elasticity and inelasticity?
An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small.
What are the factors of production?
land, or the physical space and natural resources, labor, or the workers, capital, or the money and equipment, and entrepreneurship, or the ideas and drive
What are economies of scale?
Economies of scale occur when the factors of production are increased leading to lower average costs which means firms will have more profit.
What is a barter economy?
It is when a society does not use money to exchange goods and services.
What is supply?
Supply means the amount producers are willing and able to provide to the market at a given price.
What is the difference between product and factor markets?
The product market is where goods and services are sold and bought, while the factor market is where different factors of production like land, capital, and labor are bought and sold.
What is the law of supply?
An increase in the price of goods or services results in an increase in their supply.
What is the law of demand?
The law of demand states that as prices rise, customers buy less.
What is enterprise of the factors of production?
Having an idea of how to use the land, labour and capital to make a profit.
