Supply & Demand
A consumer’s willingness and ability to purchase goods and services at a particular price.
Demand
deciding between two or more different options. Economic theory dictates that individuals make choices that result in the optimal benefit or utility for them.
Choice
markets where there are many buyers and sellers; all sellers are offering nearly identical products; entry is easy; and individual buyers and sellers have no control over price. Ie commodity providers (farmers or fishermen); very few purely competitive markets.
Perfect Competition
Makes a product ex. John Deere
Manufacturer
Total value of goods and services produced in a country in 1 year
GDP
A seller’s willingness and ability to offer goods and services for sale, at a particular price.
Supply
the loss of potential gain from one alternative when another alternative is chosen instead
Opportunity Cost
markets where there are still many buyers and sellers, but the products are “differentiated” through quality, features, name-brand or advertising; entry is still easy; and sellers have limited control over price. Ie novels, movies, restaurants, beauty shops, locksmiths, churches.
Monopolistic Competition
Sells the final product to consumers ex. Foot Locker
general rise in prices for all goods and services measured as a percentage
Inflation
The intersection of supply and demand.
Equilibrium
anything that motivates someone to do something. In terms of economics, as the price of a good increases, the quantity demanded by consumers decreases. For the suppliers, as the cost of the product increases, the quantity supplied increases.
Incentives
markets where there are few sellers selling similar products, giving them significant power over price and quantity in the market; it’s difficult for new sellers to enter due to high startup costs, brand loyalty or other factors. Ie domestic cars, athletic apparel, national pharmacies, hotel chains
Oligopoly
Buys products in bulk from the manufacturer and sells to retailer or consumer ex. Costco
Wholesaler
the percentage of the labour market that is unemployed or not working but are seeking employment
Unemployment Rate
If quantity demanded is greater than quantity supplied, there will be a
Shortage
consumers have unlimited wants and needs, but have limited resources. The demand for a good or service is often greater than its availability, therefore choices available to consumers are limited.
Scarcity
markets where there is literally one seller of a unique good, who has tremendous control over price and quantity in the market; entry is impossible due to patents, government protection or other factors. Ie water, gas, or electricity providers
Monopoly
Brings goods into Canada from other countries
Highest point -demand for goods and services is highest, unemployment is lowest.
Peak
If quantity demanded is less than the quantity supplied, there will be a
Surplus
the exclusive authority to determine how a resource is used.
Property Rights
What kind of market structure would Apple iPhones fall under
Oligopoly
Owned by one person easiest to form and easiest to dissolve Pros: you get all profit, make all decisions. Cons: Unlimited Liability
Sole Proprietorship
Economic activity is decreasing, demand for goods and services is decreasing, unemployment is rising.
Recession