Studied by 4 peoplefactord of production
the inputs for producing a product
economic groups
consumers, producers, government
how do consumers interact with other economic groups
government: paying taxes and receiving benefits through public services and infastructure, welfare funding etc
producers: buying goods and services
how do producers interact with other economic groups
government: paying taces and receiving benefits through public services and infastructure, subsidies etc
consumers: sell goods and services
how does the government interact with other economic groups
consumers and producers: imposing and regulating them through taxes and laws
consumers and producers: receiving tax income
market
a place where consumers and producers meet to exchange goods and services, and then interact to establish a price
types of markets
factor markets and product markets
factor markets
the market where factors of production are sold, e.g. a livestock market which may trade sheep or cows
product markets
the market where final goods and services are sold and bought
primary sector of the economy
extraction of raw materials (~10% in the UK)
secondary sector of the economy
turning raw materials into finished products, e.g. clothes and furniture, including capital and consumer goods and energy production (~20% in the UK)
tertiary sector of the economy
providing services (non-tangible products) (~70% in the UK, and the fastest-growing sector)
benefits of specialisation for producers (7)
can produce higher-quality output at a lower cost due to faster and more skilled workers
training new workers is easier as they only need to learn one task
allows further savings in time and costs
allows further savings in time and costs
firms can benefit from economies of scale so prices of goods and services are lower resulting in increaed sales and revenue
less waste is produces for certain producers as workers will be very capable at one specific task so they are less likely to make mistakes +
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Note
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