Introduction to Economics
What is economics?
Study of how people satisfy their needs and wants with limited resources
Goods are best defined as
Physical items that satisfy wants and needs
A consumer’s main role in the economy is to:
Purchase goods and services
In the circular flow model, households provide:
Resources to firms
Cost-plus pricing includes:
Adding a fixed profit to the cost
The economic problem is best defined as
Unlimited wants with limited resources
List 3 services
barbar, hairdresser, plumber ect
A producer’s main role in the economy is to
Sell goods and services
In the circular flow, firms provide households with:
Income
Economy pricing is designed to
Provide low-cost products to consumers
What is scarcity?
Having limited resources to meet unlimited wants
Goods are __________, while services are __________.
Tangible; intangible
Define interdependence
In a market, consumers and producers rely on each other.
The product market in the circular flow model represents:
Where goods and services are bought and sold
Psychological pricing focuses on
Consumer perceptions
provide an example of opportunity cost
Buying a new phone instead of saving money
Provide 3 exampls of goods (wants)
laptop, pool, holiday house,
provide 3 examples of consumers
family buying groceries ect
Oligopoly describes a market with
A few large producers
A demand curve typically slopes
Downward from left to right
What are needs and wants? and provide an example
Items that are nice to have but not essential
Basic requirements for survival
explain the difference between a good and a service
The main difference is that a good is a tangible item that can be seen and touched, while a service is an action or activity that someone performs for another person.
Imagine you run a bakery, and suddenly there’s a huge increase in the price of flour. How might this affect you as a producer and the consumers who buy from your bakery?
The increase in the price of flour (a key ingredient) would raise production costs, making it more expensive to bake goods. The bakery might decide to increase prices to cover these costs or reduce the amount they produce. Higher prices for bakery items might lead some consumers to buy less or choose alternatives, affecting demand.
Monopoly is a market structure with
Only one producer
Which market structure is most associated with consumer choice?
Perfect competition