Supply
What is supply?
The quantity of a good or service that producers are willing and able to supply at a given price in a particular time period, ceteris paribus
Define demand.
The quantity of a good or service that consumers are willing and able to buy at given prices in a particular time period, ceteris paribus
Why are there opportunity costs?
Because resources are limited. (scarce)
What are factors of production?
Land, labour, enterprise and capital.
What are the 4 functions of money?
1. Medium of exchange
2. Measure of value /unit of account
3. Standard of deferred payment
4. Store of value
What is price elasticity of supply?
Price elasticity of supply measures the responsiveness of quantity supplied to change in price.
What is more beneficial to producers, elastic demand or inelastic demand?
Inelastic - where a percentage change in the quantity demanded is lower than the percentage change in price
What is the opportunity cost when you chose IGCSE Economics?
The other course you could be taking during the same time period and/or sacrifice your GPA if you are not confident with the subject.
What are the rewards for each factor of production?
Land - rent
Labour - wages
Capital - interest
Entrepreneurship - profit
What is quantitative easing? (QE)
Where a central bank buys financial assets from banks and other private businesses with new electronically created money.
Why supply and price are positively related?
Because people are more willing and able to sell when the price is high.
What brings a contraction in demand?
Decrease in the quantity demanded due to an increase in price of a good or service.
What is a the production possibility curve?
A graph that shows the maximum possible output for two goods or services with a given amount of resources.
What is the basic economic problem?
How can scarce resources be most effectively used to satisfy people's unlimited needs and wants.
All of the following contribute to a free market system except
1. Economic freedom
2. Competition
3. Self-Interest
4. Government ownership
4. Government ownership
What are the factors that affect supply?
Availability of resources, labour productivity, disasters and war, taxes and subsidies, weather, etc.
TIGERS
Using an example, explain how to distinguish between a movement along the demand curve and a shift of demand curve.
Shift = NON price determinant (TIRES)
A woman owns a TV which she bought for $300. She is considering buying a better TV for $450. Her neighbor is offering $200 for her old TV. What is her opportunity cost if she rejects?
The $200 that her neighbor is offering
What is resource allocation?
The way resources are allocated to the production of the goods and services most wanted by consumers.
Which economic system relies solely on the government to produce and distribute goods and services?
1. Market
2. Centrally-planned (command)
3. Capitalism
4. Mixed
Centrally-planned (command)
When does market failure occur?
A situation where the economy's resources are not allocated efficiently - the market does not produce the goods and services that consumers most want and in a quantity that is require.
What would be 3 main determinants of demand for Holidays in Scotland
TIRES and/or:
- People's level of income.
· Tastes and preferences of consumers.
· Holiday costs.
· Level of competition.
· Distribution of people’s wealth.
· Vacation entitlements.
· Government policy and regulation.
The opportunity cost is the _______ foregone when making an economics decision.
the next best alternative
What is mobility of factors of production?
How easy or difficult it is for factors of production to be transferred to alternative industries.
What is the difference between economies and diseconomies of scale?
Economies of scale is where an increase in the level of production results in a fall in the average cost of production
Diseconomies of scale is where an increase in the level of production results in a rise in the average cost of production