Types of Markets in Australia
These two market structures represent the opposite ends of the competitive spectrum; one has infinite sellers of identical products, while the other has only one.
What are pure competitive and monopoly markets?
Because resources are scarce, choosing to spend more of the government budget on healthcare means there is less available for education; this "either-or" situation is known as this.
What is a tradeoff?
This is the only factor that causes a movement along a supply or demand curve
What is a change in price?
This term refers to the price of one good or service compared to the price of another,
What are relative prices?
This term refers to the legal minimum hourly rate that an employer must pay their workers, acting as a "price floor" in the market.
What is minimum wage?
How consumers dictate the way resources are allocated and which products are produced
What is consumer sovereignty?
If a student spends two hours studying Economics instead of working a part-time job for $25 an hour, the $50 they "gave up" represents this economic concept.
"What is opportunity cost?"
If the price of raw materials increases, the supply curve will shift in this direction.
What is Left (or a Decrease in Supply)?
If the price of Apples rises by 20% while the price of Oranges stays the same, the relative price of Apples has done this.
What is increased?
When the government sets a minimum wage above the equilibrium, it creates this market condition where the quantity of labour supplied by workers is greater than the quantity demanded by firms.
What is a surplus/oversupply of labour?
Many buyers and sellers with some control over prices
What is monopolistic competition?
If an economy is producing at a point inside its PPF curve, it indicates that resources are being used in this way.
If the price of a product rises, we see a movement along the curve; however, if the government grants a subsidy to producers, the entire curve does this
What is shift to the right (increase)?
When the relative price of a good increases, consumers tend to switch to cheaper alternatives, illustrating this economic "effect."
This term refers to the total compensation that an employee receives in exchange for their labour.
What is remuneration?
The ability to dictate/set prices in a market
What is market power?
This type of efficiency is achieved when resources are used to produce the specific combination of goods and services that best satisfies consumer preferences and society's needs.
What is allocative efficiency?
An unexpected drought in the Midwest would cause this specific change to the supply curve for agricultural products like corn.
What is a Leftward Shift (Decrease in Supply)?
"For a producer, an increase in the relative price of Wheat compared to Barley provides this two-word indicator to move their factors of production toward producing more of this crop."
What is a price signal and what is resource allocation?
Because a firm's desire to hire workers depends entirely on the level of consumer demand for the final product those workers create, labour is known as this type of demand.
What is derived demand?
Increased competition in a market generally leads to these two primary benefits for consumers regarding the nature of the goods.
What are lower prices and higher quality?
If a nation experiences a massive natural disaster that destroys factories, this specific change occurs to the entire Production Possibility Frontier (PPF).
What is an inward/leftward shift of the PPF?
While a government subsidy shifts the supply curve to the right, this government-imposed cost on production shifts the supply curve to the left.
What is an Indirect Tax (or Excise Tax)?
When the relative price of an "essential" good (like petrol) rises significantly, consumers have less "discretionary income" left over, often leading to a decrease in demand for these types of non-essential goods.
What are Luxury Goods (or Wants / Non-essential goods)?
If there is a "shortage" of specialized doctors, the relative price (wage) of doctors will likely do this to signal more students to enter that profession.
What is increase? (rise)