Micro - 2 - The Role Of Markets Flashcards
(16 cards)
What’s division of labour?
Splitting up production into a number of tasks, through this workers develop greater skill
What’s the barter system?
A way of trading where people exchange goods and services directly without using money.
It’s when both people have something the other one wants. It’s called the double coincidence of wants.
Factors that shift the demand curve:
PASIFIC
Change in:
Population
Advertising
Price of Substitutes
Income
Fashion and taste
Income tax
Price of Complement
What’s individual demand?
Demand of one individual or firm
What’s market demand?
Total quantity demanded by all consumers.
Joint demand?
Complements. They’re demanded together.
Composite demand?
Demand for goods that have multiple uses?
Competitive demand?
Substitutes
Marginal utility?
Additional utility, or amount of satisfaction, gained from each addition unit of output.
Individual supply?
Supply of an individual producer at each price
Market supply?
Sum of all supply of all producers in the industry
Factors that shift supply:
Changes in cost of production
New technology
Indirect taxes
Subsidies
Changes in the number of firms in an industry
Joint supply?
When two goods are produced together from the same origin.
(Milk, beef, leather comes from a cow)
Competitive supply.
An alternative product a firm could make with its resources
Consumer surplus?
The difference between what a consumer is willing and able to pay for a good or service and what they actually pay.
Producer surplus?
The difference between what a producer is willing and able to supply a good for and what they actually receive.
