The Market System (ch. 1-4)

________: large numbers of highly skilled and qualified workers move overseas, reducing output.

________ may attempt to sell as much as possible individually, thus selling larger quantities and lowering prices, making profits negative.

When a point moves along the ________, an opportunity cost occurs because you could be producing a different amount of something else and get more of it.

________: droughts reduce agricultural capacity, reducing output.

Improved ________: new production methods developed, increasing output.

The ________ is a sacrifice made when making a choice.

demand can be shown graphically, on the _____________.

________: some nations may find more resources, so they can produce more, thus increasing output.

________: ________ is faster and more reliable in production, thus causing more output.

When the ________ shifts inwards, it means that there is negative economic growth.

________ is the amount of a good which is bought at given prices over periods of time.

new production methods developed, increasing output

economy becomes more productive as the proportion of educated workers increases as they can comprehend tasks faster and increase output

some nations may find more resources, so they can produce more, thus increasing output

running out of resources, reducing output

droughts reduce agricultural capacity, reducing output

large numbers of highly skilled and qualified workers move overseas, reducing output

less production availability as fewer resources, reducing output

consumers may be influenced by people such as friends or parents and adopt their buying habits

an example of a demographic change is an ageing population, where there is an increase in demand for retirement homes and holidays for the elderly

firms may attempt to influence demand for their products through advertising and other forms of promotion

when disposable income rises, demand for goods rises

demand rises for things which are more fashionable and attractive at the time, however, these tastes change over time

a substitute good is a good which is bought as an alternative to another for the same function

a complementary good is a good which is purchased together with another good because it is consumed with that other good

all countries have finite resources, yet we have unlimited wants

What to produce? How to produce? For whom to produce?

goods purchased by firms to produce other goods

goods purchased by households with the intention of using them

increase in the level of output by a nation

New Technology, Improved Efficiency, Education and Training, New Resources

Resource Depletion, Weather, Emigration, Wars and conflict

Consumers aim to maximise benefits, Businesses aim to maximise their profits

• calculation difficulty

• habits

• influenced

• inadequate information

• they cannot make balanced choices

Sales managers may attempt to sell as much as possible individually, Alternative business objectives, Enterprises operating as charities, Social Enterprises, don't have access to all of the information

how much would be bought at any given price

Demographic Changes, advertising, income, fashion/tastes, substitute price, complement price

1. They will buy the cheapest product out of products of the same quality

2. They will buy the highest quality product out of products at the same price

1. They will buy the cheapest resources out of resources at the same price

2. They will choose the highest price that the market can stand to maximise revenue and profit

amount of a good which is bought at given prices over periods of time

inverse