Market Definitions
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Private cost: the cost for an individual to get a good or service
Private benefit: the benefit of a good or service you bought
Social benefit: the way the production of a good or its consumption affects the society. Either negative or positive
Money: anything that is generally accepted as a payment for goods and services and settlements of debts. It must be durable, scarce, portable, and must allow fractional payment (divisible).
Barter: Where
goods and services were used as the medium of exchange. Was complicated
because both exchangers needed to need/want what the other person was
willing to or could give (double coincidence). Another problem was the
unit of value. How do you know how many apples a haircut is worth?
Another problem was that the goods used were perishable. Another
problem was fractional payments. What if a sweet was worth half a
chicken? Small payments could not be done if you only had a large
article to sell. It was also awkward to walk around with a large
article in use of money.
Specialization: concentrating
the use of a resource to produce a good or service, or just a few goods
or services rather than using the resources to produce all the
goods and services needed. It is based on the efficiency and
opportunity cost of production. A country or individual will specialize
in the production of that good or service that it is best suited for,
given the quantity and type of resources it has.
Specialists:
'one who knows more and more about less and less'. A person who uses
more time and resources for a certain area instead of the whole thing
that makes the topic up.
Division of labour: a
form of specialization. When the making of a good is divided into
several processes which are inter-related, and all the processes
together result in a finished product. Inter-related: inter-dependant.
Productivity: the output of FOP against time (output ? input). Output is the articles produced (example), input is hours (example).
Production: How much is produced in total on a large scale of time
- the main different is that productivity is the RATE at which the goods are produced whilst production is the TOTAL AMOUNT of goods the firm has produced
Specialization by industry: industries that specialize in the production of chemicals, coal, clothing, shoes, etc.
Specialization by firms: individual
firms which join up together to form an industry. In the textile
industry: some firms do embroidery, some specialize in dyeing, some in
weaving, etc.
Specialization by workers: Each labourer specializes in a job: farmer, lawyer, doctor, teacher, etc.
Specialization by region: some regions of countries specialize in certain areas:
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by: Admin
Total views: 1167
Word Count: 1329
Date: Sun, 21 May 2006 Time: 12:00 AM
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