Posts tagged 2

List of Definitions for Section 2

1. Market is a place where the consumers and the suppliers meet together. Here, the resources are allocated through the price mechanism. The price and the quantity demanded are determined by the equilibrium price. However, a market does not need to be a physical place where people meet face-to-face. Online shopping is one example of how the market is formed without requiring the consumers and the suppliers to meet face-to-face.

2. Structure of Market in the spectrum of competition

  • Perfect Competition occurs where there are many competitors who produce the same product and the market sets the price.
  • Monopoly occurs when there is only one supplier for the market. These monopolists set the price and profits very highly. They may set as many barriers as they can to stop other possible competitors from entering the market they are in control of.
  • Monopolistic Competition occurs when the market has both the characteristics of perfect competition and monopoly.
  • Oligopoly occurs when there are just few competitors in the market. However, they have interdependence to each other. Also, they may spend a lot of money on advertisement and promotion.

Summary of market types

Type of Market

Number of Firms

Freedom of Entry

Nature of Product

Examples

Demand Curve for Firms

Perfect competition

Many

Unrestricted

Homogenous

(undifferentiated)

Cabbages

Carrots

Horizontal

the firm is a price-taker

Monopolistic competition

Many, Several

Unrestricted

Differentiated

Plumbers

Restaurants

Downward sloping, relatively elastic, some control over price

Oligopoly

Few

Restricted

Undifferentiated or Differentiated

Cement

Cars

Kinked

Monopoly

One

Restricted or Completely blocked

Unique

Local water companies

Downward sloping, inelastic, considerable control over pric

Table Obtained from Triple A Text

3. Demand is defined as ‘that quantity of a good or service that would be bought at each and every price over a period of time’. Must include these three factors:

  • The desire for a product
  • A willingness to pay for it
  • The ability to pay for it

4. Supply is defined as the quantity of goods and services that will be supplied to the market at various prices over a given period of time. These are some of the determinants of supply:

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What I have Learned about myself as an IB Economics Student

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Through out the first quarter of IB Economics, there were many hardships in understanding what economics really mean. However, now I feel like I am taking off to a journey for enriched science of economics.

I had confusions and complaints throughout the quarter about the laptop program. I thought that it was burdensome and bothering to carry a laptop to school. Also, I thought that I was struggling with the computer school gave to us. However, I now understand the benefits of using laptops in an economics class. By using laptops, not only we were efficient, but we were more involved in the subject called economics. Also, I understood the benefits of laptops for interacting with economic articles. I think that Internet economics articles are key in understanding economics nowadays.

I found myself actually being involved and getting interested in this subject. It was mainly because of the fact that economics is very related to our daily lives. If you look at chemistry or physics, I really did not find relevance in my everyday life, however, I understood the high relevance of economics in my everyday life.

I wish to be a better economics student next quarter.

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Why I enrolled for Economics

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I have always thought of economics as a great study of how the world works. There is one and the most important reason why I chose this class.

The  reason is that economics is easy compared to other social studies subjects such as history and geography. When some subject is ‘easy’ to study, it should not be recognized as bad or inferior  subject. In fact, economics is comparably easy to study because of its feature of relevance to everyday life unlike history or geography.

In short, because economics is an easy and relevant study of our daily life, I enrolled for economics.

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