Unit 3 Pt. 1 Flashcards
(26 cards)
Demand
The quantities of a specific good or service individuals are willing + able to purchase at various possible prices.
Law of Demand
Quantity demanded is inversely related to price.
Determinants of Demand (shift OF the curve)
- Income
- Tastes + preferences
- Price of related goods
- Expectations - future prices, future income
- Population (or # of buyers)
Changes in Quantity Demanded (movement ALONG the curve)
A change in a good’s own price leads to a change in quantity demanded.
Supply
The quantities of a specific good or service that firms are willing to sell at various possible prices, other things being constant.
Law of Supply
There is a direct relationship between the price of any good and its quantity supplied, holding other factors constant.
Determinants of Supply (shift OF the curve)
- Cost of inputs
- Tech + productivity
- Taxes + subsidies
- # of firms in the industry
Changes in Quantity Supplied (movement ALONG the curve)
A change in a good’s own price –> change in quantity supplied.
Equilibrium
When quantity supplied equals quantity demanded at a particular price.
Fair Trade
Trade in which fair prices are paid to producers in developing countries.
Relationship Between Poor & Rich Countries
- Rich countries often limit + control poor countries’ share of the world market
- By charging high taxes on imported goods - Many poor countries can only afford to export raw materials, which give for lower returns than finished products
Relationship Between Poor & Rich Countries: Role of Multinational Corporations
Employ millions of ppl on low pay + in poor working conditions in many poorer countries.
Relationship Between Poor & Rich Countries: Role of Government
Poorer nations are unlikely to complain for fear of driving away investment.
Battery Farm Eggs
- Where most eggs are from
- Chickens confined to small wire cages + live life to simply produce eggs
Free Range Eggs
Opp. of battery farms
Types of Ethical Buying: Positive Buying
Favouring particular ethical products.
Types of Ethical Buying: Negative Buying
Avoiding products you disapprove of.
Types of Ethical Buying: Company Based Buying
Targeting a business + avoiding all products made by one company.
Types of Ethical Buying: Fully Screened Approach
Looking both at companies + products & evaluating which product is more ethical overall.
Underground Economy
- Criminal activity
- Labourers paid in cash
- Illegal taxi services
- Borrowing from ‘loan sharks’ at extortionate interest rates
- Buying untaxed cigarettes & alcohol
- Counterfeit goods
- Prostitution
Why should one NOT hire someone “under the table”?
- Poor or incomplete work
- Cost overruns
- Fraud - when you pay for work that is never done
- Use of substandard material
How is Supreme allowed to sell its products when it “lifts” logos from other companies?
They collab w/ high end brands, entirely based on ripping other brands off.
Conscious Consumption
When a person buys things others can’t afford to show off.
Veblen Goods
Price goes up, demand goes up.
