Economics- Edexcel 1.2.7
Help!
|
|
||||
|---|---|---|---|---|---|
| price mechanism | changes in market price act as a signal about how scarce resources should be allocated
🗑
|
||||
| Adam Smith’s invisible hand | the ‘invisible hand’ of the price mechanism operates through the pursuit of self-interest, allocating resources in society’s best interest
🗑
|
||||
| the 3 main functions of the price mechanism | signalling, incentive and rationing
🗑
|
||||
| signalling function | they adjust to demonstrate where resources are required
🗑
|
||||
| incentive function | financial motivations for people to take certain actions
🗑
|
||||
| rationing function | prices serve to ration scarce resources when market demand outstrips supply
🗑
|
||||
| centralised | an economy in which business activities and the allocation of resources are determined by government order rather than market forces
🗑
|
||||
| decentralised | a type of economic system in which decision-making is distributed amongst various economic agents or localized within production agents
🗑
|
||||
| market failure | occurs when signalling and incentive functions fail to operate optimally leading to a loss of economic and social welfare
🗑
|
||||
| example of market failure | when a monopolist seller sets high rates to the products leaving no choice for the buyers other than to purchase the overpriced goods
🗑
|
||||
| secondary markets | occur when buyers and sellers are prepared to use an alternative market to re-sell items that have already been purchased
🗑
|
||||
| example of a secondary market | in tickets for big concerts, festivals and major sporting events
🗑
|
||||
| government intervention | any action carried out by the government that affects the market with the objective of changing the free market equilibrium / outcome
🗑
|
||||
| examples of government intervention | changes in relative prices brought about by subsidies and indirect taxation or imposing maximum and minimum prices
🗑
|
||||
| law of unintended consequences | actions of people, especially of government, always have effects that are unanticipated or unintended
🗑
|
||||
| shift in the demand curve | causes an expansion along the supply curve
🗑
|
||||
| asking price | minimum price at which a security commodity or currency is offered for sale on a market
🗑
|
||||
| black market | an illegal market in which the market price is higher than a legally imposed price ceiling
🗑
|
||||
| excess demand | difference between the quantity supplied and the higher quantity demanded when the price is set below the equilibrium price
🗑
|
||||
| excess supply | when there are unsold goods at the current market price
🗑
|
||||
| inventories | unsold products(finished and unfinished) and the raw materials used to make them
🗑
|
||||
| market incentives | signals that motivate actors to change their behaviour, perhaps in the direction of greater efficiency or profit
🗑
|
||||
| economic actors | the participants in economic activities in an economy, grouped into three categories: individuals/households, firms, and the government
🗑
|
||||
| utility | a measure of the satisfaction that we get from purchasing and consuming a good or service
🗑
|
Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Created by:
jessharris
Popular Economics sets