Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
27 Cards in this Set
- Front
- Back
|
On what do demanders and suppliers negotiate on?
|
Quantity, Quality, terms of delivery and price
|
|
|
Relevant market
|
The part of the total market one company serves
|
|
|
Business sector
|
Companies that make the same sorts of products using similar production methods
|
|
|
Economic order
|
The sum of the collective rules values, norms and institutions that determine economic activities
|
|
|
Values
|
Intangible thoughts that are worth striving for. We want to achieve and hold them in life. (employment, productivity equality, liberty, solidarity)
|
|
|
Kinds of values
|
Collective values: certain values a large part of the community holds
Economic values: profitability and employment Moral values: how we view our human existence |
|
|
Norms
|
Rules that are derived from values. They're a guide for human behavior in concrete situations. (etiquette, behavior towards staff)
|
|
|
Institutions
|
The bodies that transform laws into concrete regulations and supervise them. (laws and regulations, employer and employee organisations, government, police, judiciary)
|
|
|
Demand determining factors
|
The underlying causes for demand
-consumer needs -the price of the products -the price of other goods -the income of consumers and the size of the population |
|
|
Consumer pattern of consumption
|
What a consumer purchases to fulfill first its primary and second its secondary needs
|
|
|
Why do companies highlight the social and cultural aspects of the satisfaction of needs in their advertising campaigns?
|
Because many goods that are intended to satisfy the basic needs have a side effect that they satisfy other needs as well.
-Clothes: protection and society position |
|
|
Consumer preferences
|
Determine consumer spending priorities, and are influenced by a number of social and psychological variables such as age and education.
|
|
|
Psycho-social factors that influence consumer preference
|
Age-related, education, cultural trends, lifestyle trends, product improvements and innovations, seasons and climate, government measures
|
|
|
What causes demand to change?
|
-substitutes: an increase in the price of one good leads to increase demand in the other
-Complements: an increase in price of a good leads to a decrease in demand of the other good -Income -Number of buyers -Tastes -Expectations |
|
|
Price elasticity of demand
|
The relative change in the quantity demanded as a result of, and divided by the relative change in price.
|
|
|
Cross-price elasticity
|
A measure of how much quantity demanded of one good changes in response to a price change in another good
|
|
|
Income elasticity of demand
|
The percentage of change in demand as a result of a percentage change in income.
|
|
|
When is a product elastic
|
when it's very responsive to change in price/income
lower than -1 |
|
|
When is a product inelastic
|
between 0 and -1
|
|
|
In which ways can the prices of other goods affect the demand for a product? (examples)
|
-Positive cross-price elasticity, will cause the demand for goods to increase if the price of other good rises.
-Negative cross-price elasticity, will cause the demand for certain products to decrease when the price of other goods rises. -Cross-price elasticity of zero, both goods are completely independent and have no effect on each others demand. |
|
|
Demand surplus
|
Because of a maximum price, the demand is higher than it would be without regulations by the government
|
|
|
Supply surplus
|
There is more supply than there is demand. So product need to be destroyed or given away.
|
|
|
Increase in supply- what does the curve do?
|
Moves to the right
|
|
|
Increase in Demand- what does the curve do?
|
Moves to the right
|
|
|
Decrease in Demand- what does the curve do?
|
Moves to the left
|
|
|
Price elasticity of supply
|
Measures the responsiveness of quantity supplies to changes in price
|
|
|
Decrease in Supply- what does the curve do?
|
Moves to the left
|
