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Term 3 mark definitions
• a market with many buyers and sellers, good market information and
competitive market ease of entry and exit
• where the product is required for more than one use; an increase in
demand for one use will lead to a decrease in supply of the good for another
comoosite demand
• a measure of the percentage change in the quantity demanded of one good
resulting from a percentage change in the price of another
cross elasticity of
demand
• a good which generates negative externalities in consumption
demerit aood
• The demand for a factor of production used to produce another good.
derived demand
• falling average costs as the size of a firm increases .
,I
economies of scale
. the price at which quantity demanded and quantity supplied are equal and
there is no excess supply or demand
equilibrium price
. the harmful or negative side-effects of an economic activity
external costs
• effect on a third party as a result of an economic transaction
Externalities
• an economic resource used to produce goods and services
factor of production
• when government intervention in a market leads to a less efficient
allocation of resource
government failure
income inequality • When there is an uneven distribution of money coming into households
internal economies of
scale • a fall in average cost due to growth of the firm
•the cost borne by the party involved in the transaction due to the
marginal private costs
consumption (or production) of an extra unit
•occ_urs when !he production and/or use of goods and services by the market
market failure 1s not efficient
• f means by ~hic_ h demand and supply determine the price and quantity
market mechanism o a good or service in a market
• A price floor set by the government
minimum orice
. where one firm has at least a 25% share of the market.
Monopoly
• CED measures thee t t t h.
product affects the de ; en o _ w ich a change in_the price of one
positive cross elasticity Prod uct: It ts positive when the
rise/fall in the price of ;:~r:or a different
of demand rod
demanded of the oth P t p uct leads to a rise/fall in the quantity
er roduct.
• benefits received by a third party.
_eositive exte~n~~ty
Term 3 mark definitions
• a market with many buyers and sellers, good market information and
competitive market ease of entry and exit
• where the product is required for more than one use; an increase in
demand for one use will lead to a decrease in supply of the good for another
comoosite demand
• a measure of the percentage change in the quantity demanded of one good
resulting from a percentage change in the price of another
cross elasticity of
demand
• a good which generates negative externalities in consumption
demerit aood
• The demand for a factor of production used to produce another good.
derived demand
• falling average costs as the size of a firm increases .
,I
economies of scale
. the price at which quantity demanded and quantity supplied are equal and
there is no excess supply or demand
equilibrium price
. the harmful or negative side-effects of an economic activity
external costs
• effect on a third party as a result of an economic transaction
Externalities
• an economic resource used to produce goods and services
factor of production
• when government intervention in a market leads to a less efficient
allocation of resource
government failure
income inequality • When there is an uneven distribution of money coming into households
internal economies of
scale • a fall in average cost due to growth of the firm
•the cost borne by the party involved in the transaction due to the
marginal private costs
consumption (or production) of an extra unit
•occ_urs when !he production and/or use of goods and services by the market
market failure 1s not efficient
• f means by ~hic_ h demand and supply determine the price and quantity
market mechanism o a good or service in a market
• A price floor set by the government
minimum orice
. where one firm has at least a 25% share of the market.
Monopoly
• CED measures thee t t t h.
product affects the de ; en o _ w ich a change in_the price of one
positive cross elasticity Prod uct: It ts positive when the
rise/fall in the price of ;:~r:or a different
of demand rod
demanded of the oth P t p uct leads to a rise/fall in the quantity
er roduct.
• benefits received by a third party.
_eositive exte~n~~ty
