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definition of PPC
a curve that shows the maximum output of two types of products and combination of those products that can be produced with existing resources and technology
state a factor that causes a shift in the PPC
education
technology
reclamation开垦
immigration
inefficient
three key resources allocation decisions
what to produce
how to produce
for whom to produce
define demand
the willingness and ability to buy a product
Q and p relationship in demand curve
inverse relationship
What factor leads to an extension in demand?
price falls in a product itself
State three factors that cause a change in demand
income
price of substitute goods
price of complement goods
advertising campaigns
taste and fashion
population
consumers expectations
examples of two pairs of substitutes
Substitutes（替代品）：
Tea and coffee
Coke and Pepsi
Butter and margarine人造黄油
state two pairs of complements
Complements（互补品）：
Printers and ink cartridges墨盒
Cars and petrol
Bread and butter
state three factors that causes a change in supply
costs of production
indirect tax
subsidies
improvement in technology
weather conditions
disaster and war
discoveries and depletions of factors of production
a situation where demand and supply are not equal
define PED
a measure of the responsiveness of the quantity demanded to a change in price
what is meant by "-" in PED
an inverse relationship between the quantity demanded and price
draw a diagram for perfectly inelastic
vertical line
state three determinants of PED
the availability of substitutes
the proportion of income spent on that product
degree of necessity
time horizons
whether the product is addictive or not
how the market is defined
brandy loyalty
relationship between PED and total revenue
elastic demand -TR & Q
inelastic demand -TR&P
determinants of PES
time taken to produce the produce
stock availability
spare capacity
mobility of FOPdefine market economic system
an economic system where consumers determine what is produced, resources are allocated by the price mechanism and land and capital are privately owned.
state three advantages of market economy
very quick respond to change in consumer demand
wide choice
costs and prices may be low
quality may be high
state three disadvantages of a market economy
externality
abuse of monopoly power
only profitable goods will be produced
information failures
uneven distribution of income
difference between private sectors and public sectors
different in definition and aims
define market failure
market failure occurs when the market mechanism results in a misallocation of resources
objective of supply-side policy
to increase productive potential增加生产潜力