Micro 3.1.2 Markets in action Flashcards
(16 cards)
5 main markets
- healthcare market
- housing market
- agriculture market
- oil and copper market
- sports market
demand side and supply side factors affecting the housing market
demand side factors:
* change in income rates
* interest rates
* population growth
* consumer preference
supply side factors:
* contruction costs
* availability of land
* government regulations
2 main types of tenure in the UK housing market
- owner occupation
- privately rented housing
what are the 6 stamp duty tax tiers
- £0 - £125000 = 0%
- £125,001 – £250,000 = 1%
- £250,001 – £500,000 = 3%
- £500,001 – £1m = 4%
- £1m – £2m = 5%
- More than £2m = 7%
tax taken as a represntative as a percentage of a propertys purchase price
define government failure
situation where government intervention in the economy, intended to correct a market failure or improve economic outcomes, actually create inefficiencies, worsen extisting problems, or introduce new problems
what is the agriculture market
general notes
- The agricultural market shows how various economic factors influence supply demand and price
- Agricultural markets are often subject to significant fluctuations due to weather conditions, seasonality, and the perishable nature of products. These markets also tend to have relatively inelastic supply in the short run, as production cannot easily be increased in response to higher demand or prices.
- importance of government intervention with subsidies, price supports, or quotas to stabilise prices and protect farmers from extreme price volatility. External shocks and global trade can impact domestic agricultural prices and incomes, making it a relevant case for examining how markets operate and sometimes fail.
- Understanding the market allows us to apply economic concepts like price elasticity, supply and demand shifts, and the role of government in mitigating market failures.
what is the buffer stock scheme
government plan to stabilise prices in volatile markets
what causes the buffer stock scheme
- had been a long run trend for agricultural prices to fall relative to those of manafactured good
- prices have fluctuated considerably from year to year
problems of the buffer stock scheme
You have to buy the stock off the farmers which is expensive to buy the goods and store them, also if there was a bad harvest still may not have enough stock to put back onto the market
what is the oil and copper market
general notes
- The market is an examples of commodity markets that play a crucial role in global economies. Both oil and copper are essential resources in industrial production, energy, and transportation, so their demand relatively inelastic in the short run.
- The oil market is heavily influenced by geopolitical events, extraction costs, and the strategic actions of major oil-producing countries. Fluctuations in oil prices can have widespread economic impacts, influencing inflation, production costs, and consumer spending globally.
- The copper market is driven by industrial demand, particularly in construction, electronics, and manufacturing. Supply disruptions, such as strikes in major mining regions, can lead to price spikes due to copper’s critical role in these industries.
- These markets also highlight the concept of price volatility, market shocks, and government interventions. For instance, countries may use strategic reserves, subsidies, or tariffs to stabilise prices or reduce dependency on these volatile commodities.
supply factors of the oil and copper market
- supply factors: geopolitical instability, natural resource constraints, and the actions of large producers or cartels, like OPEC in the case of oil.
what are the two main reasons for oil and copper having volatile prices
- have inelastic supply curve
- speculation = people purchase and sell primary products hope that its price will rise or fall respectively
what is the sports market
general notes
- Example of dynamic and growing industry that demonstrates interaction of supply and demand, market structure and consumer behaviour. Includes professionals, leagues, broadcasting rights, merchandise and ticket sales which contribute to economic significance
- Often have inelastic demand, particularly major events like the olympics and wolrd cups where consumers pay premuim prices.
what are the supply and demand factors in sports market
- Supply factors: availability of venues, broadcasting rights, and sponsorship deals, which can impact the revenue streams of teams and leagues.
- demand factors: consumer preference, popularity of sport and performance of team/athletes
what is a black market
when demand exceeds supply
often happens in sport
why do football clubs use differential pricing
they offer different ticket prices to different age groups (price discrimination) so they can maximise their revenue
