Markets in Action 4.0 / 5 based on 3 ratings ? EconomicsCompetitive marketsASOCR Created by: Meenakshi GopalCreated on: 14-12-12 15:09 Opportunity Cost The cost of the (next) best alternative which is foregone when a choice is made 1 of 24 Specialisation the concentration by a worker or workers, firm, region or whole economy on a narroew range of goods and services 2 of 24 Exchange the process by which goods and services are traded 3 of 24 Division of Labour the specialisation of labour where the production process is broken down into seperate tasks 4 of 24 Productivity output, or production of a good or service, per worker 5 of 24 Production Possibility Curve this shows the maximum quantities of different combinations of output of two prouducts, given current resources and the state of technology 6 of 24 Productive Potential the maximum output that an economy is capable of producing 7 of 24 Supply the quantity of a product that producers are willing and able to provide at different market prices over a period of time 8 of 24 Demand the quantity of a product that consumers are able and willing to purchase at various prices over a period of time 9 of 24 Command Economy an economic system in which most resources are state owned and also allocated centrally 10 of 24 Mixed Economy an economic system in which resources are allocated through a mixture of the market and direct public sector involvement 11 of 24 Market where or when buyers and sellers meet to trade or exchange products 12 of 24 Notional Demand the desire for a product 13 of 24 Effective Demand the willingness and ability to buy a product 14 of 24 Demand Curve this shows the relationship between the quantity demanded and the price of the product 15 of 24 Movement along the demand curve this is in response to a change in price of a product 16 of 24 Consumer Surplus the extra amount that a consumer is willing to pay for a product above the price that is actually paid 17 of 24 Normal Goods goods for which an increase in income leads to an increase in demand 18 of 24 Inferior Goods goods for which an increase in income leads to a fall in demand 19 of 24 Producer Surplus the difference between the price a producer is willing to accept and what is actually paid 20 of 24 Equilibrium Price the price where demand and supply are equal 21 of 24 Disequilibrium any position in the market where demand and supply are NOT equal 22 of 24 Elasticity the extent to which buyers and sellers respond to change in market conditions 23 of 24 Price Elasticity of Demand the responsiveness of the quantity demanded to a change in the price of a product 24 of 24
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