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5 Cards in this Set
- Front
- Back
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RATIONING
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Wants are infinite but resources are scare. If many consumers demand a product but supply is scarce, then prices will be high, limited supply will be rationed to those buyers willing and able to pay a high price
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SIGNALLING
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If market prices are rising because of rising demand, this is a signal yo suppliers to expand their production to meet the high demand
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INTERRELATED MARKETS (DERIVED DEMAND)
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Is when the demand for one good is due to it being used within the production of another.
E.g. Steel is derived in part from the demand for cars |
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INTERRELATED MARKETS (COMPOSITE DEMAND)
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-Demand for a good that has multiple uses
E.g. People may demand oil because it can be used to create both petrol and diesel -If demand for one use increases, the supply of the good available for other uses will fall |
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INTERRELATED MARKETS (JOINT SUPPLY)
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-2 or more goods that derive from a single product or process
E.g. dairy cattle can provide milk, hides (leather), and meat -High demand for one of the goods might result in an increase in the breeding of dairy cattle and reduce prices for the other 2 products |
