UNIT 2

• What is Net pay?

  Net Pay:

  
  

  • The amount an employee actually takes home after all deductions.
  • Deductions include taxes (federal, state, local), Social Security, Medicare, health insurance premiums, retirement contributions, and other voluntary deductions.
  • Formula: Net pay = Gross - Deductions
• What is Gross pay ?

  • The total amount of money earned by an employee before any deductions.
  • Includes wages, salary, bonuses, commissions, and any overtime pay.
  • Formula: Gross Pay=Hourly Rate×Hours Worked+Bonuses or Overtime
  • For salaried employees, gross pay is usually the annual salary divided by the number of pay periods.
• what is it meant by demand?

  1. demand is the quantity of a good or service that consumers are will to pay for at a certain price and time period
• What is individual demand?


  A personal demand curve for a good or service.
• does a demand curve go up or down? 


  DOWN TO THE GROUND ( economic yoga )
• What is market demand?

  the market demand is the total demand for goods or services.
• why do shifts in the demand curve happen?


  shifts are caused by non-price factors.
• What does it mean by movements along the demand curve?


  The demand curve is caused by changes in the price of goods or services.
• Things that affect the demand curve?


  Income, price of related goods, consumer preferences, population, advertising, and expectations.
• what is the economic situation?

  the state of the economy a whole/ or the world economy can affect demand?
• what is price elasticity?


  price elasticity measures teh responsiveness of quantity demanded to a change in the price of the product.
• Inelastic demand? 


  if a price change leads to a smaller change in quantity the the demand price is inelastic. which means it has a value between 0 and -1. goods or services that have a few substitutes or are necessities are usually price inelastic.
• elastic demand?


  if a price change leads to a larger change in quantity as in the case of the bar of chocolate the demand price is elastic. which means it has a value of + 0
• what is supply?


  The quantity of a good or service that producers are willing and able to offer for sale at various prices.
• does a supply curve go up or down?

  UP TO THE SKY?
• what is individual supply?


  individual supply is the supply of good by an individual?
• Shift of the supply curve?


  the complete movement of the existing supply curve either outward ( to the right ) or inwards ( to the left )
• movement along the supply curve ?


  when the price changes, leading to a movement up ( expansion )

  or down ( contraction ) on the existing supply curve.
• what causes shifts in the supply curve?


  • costs of production
  • taxes and subsidies
  • technology
  • climate
  • number of producers or size of existing firms
  • government regulation
• inelastic supply? 


  if a price change leads to a smaller change in the quantity then it is inelastic.
• elsatic supply?

  if the price change leads to a larger increase the price is elastic
• How can firms increase their elasticity?


  • adopting, or upgrading to the latest tech
  • creating a spare capacity
  • improving storage methods to prolong the life of a product
  • keeping a large amounts of stock
  • training employees so that they can preform a range of jobs as required
• what is the price? 


  price is the sum of money paid by a consumer to a producer fro a good or service. it is determined by the interaction of supple and demand?
• what is efficiency?

  the optimal production and distribution of scare resources.
• what is the equilibrium of price and quantity? 


  where the quantity supplied exactly matches the quantity demanded.
• how to determine the price?

  the interaction of the free market forces of demand and supply to establish the general level of price from good or service.
• what is competition in economics? 


  where different firms are trying to sell similar products to a consumer.
• why do producers compete?


  • to enter a market
  • to survive in a market
  • to make profit
• what is a monopoly?


  is a sole producer of a good or service. this could be country as a whole. ie : when one producer has at least 25% of the makret share.
• what is an oligopoly? is where a small number of firms control a large majority of the market share. ie : the five largest firms own 50 %
• what is a monopoly like?


  • usually very large
  • number of firms is one
  • can set prices but can't control the quantity
  • in theory they will charge higher price
  • they aren't very efficient in theory
• what is an oligopoly like?


  • can be very large but may have smaller firms
  • a few firms
  • can influence price but is restrained by the reaction of rivals may try to collude
  • noth price and quantity will depend on how strong competitors are and the ability to collude
  • usually seen as not efficient
• what is a competitive market like? 


  • normally small
  • many firms
  • price is set by market forces of supply and demand
  • price and quantity are both set by market forces ( theory price will be higher quantity will be lower )
  • normally lead to great economic efficiency
• what is the labour market? 


  where workers sell their labour and employers buy labour: it consists of households ' supply of labour' and firms ' demand for labour '
• what are gross and net pay? 


  gross pay is the amount of money that an employee earns before any deductions are made.
• What is profit?


  The difference between the revenue received from the sale of a good or service and the costs involved in making and/or selling the good, including any opportunity costs.