ECONOMICS QUIZ CHAPTER 2

Limits the number of producers in some markets and may reflect high start-up costs, government regulations and product patents.

Is a scheme designed to put a price on pollution by firms and consumers of goods and services. Polluters must have permits or carbon credits to cover each tonne of CO₂ emissions. The price of these offsets is determined by demand relative to the supply. By establishing a price and making pollution costly and less profitable, polluters change their behaviour and find cleaner products and production methods.

 Is a local institution, perhaps in a suburb or small town, where buyers and sellers of crafts, foods, used wares and plants meet to negotiate prices.

Is where the particular types of goods and services produced reflect what individual consumers purchase, rather than this decision being made through government planning.

Involves buyers and sellers of virtual or digital currencies. Often trading these currencies is seen as an investment where profits can sometimes be made as a result of changes in their price over a period of time.

Represents the amount of a good or service that consumers are prepared to purchase at a given price. The quantity demanded varies inversely with price.

Are used to illustrate, hypothetically, how buyers (demanders) and sellers (suppliers) of a particular type of good or service help determine the market price at which the item sells.

Are reductions in average per unit production costs that are gained when a firm’s fixed costs (e.g. for product design, equipment, material or advertising) can be spread more thinly across a larger level of output.

consists of institutions that help to organize the production and distribution of goods, services and incomes. There are different types of economic systems — traditional, pure market, purely planned, and mixed economy (prominently market-based economies).

Is the natural situation towards which all free and competitive markets tend to move. It exists only when the quantity demanded exactly equals the quantity supplied, and there is no market glut or shortage.