Economics: Retail and Labour Markets

Markets and Economy

• Retail markets involve selling goods and services to consumers, while labor markets deal with the exchange of work for wages between workers and employers.
• Retail dynamics are driven by consumer behavior and competition, whereas factors like supply, demand, and government policies influence labor markets.
• Both retail markets and labor markets are critical to the economy, playing important roles.

Economic Problem and Scarcity

• The economic problem is defined as scarcity, where the demand for a good or service is greater than the supply of the good or service.

Economic Boom and Recession

• During an economic boom, there is growth, job creation, and rising prices, while during a recession, the economy shrinks, jobs are lost, and prices might fall.
• Governments often intervene to stabilize the economy during both booms and recessions.

Government Intervention in Technology

• Government involvement in technology can change how things work in the market, by making rules about data handling or investing in new ideas.
• This can affect how businesses operate and how people access technology, potentially creating new opportunities in the market.

Sectors of the Economy

• Household Sector: includes individuals and families who consume goods and services and receive income from working.
• Firms Sector: includes businesses that produce goods and services and generate income by selling them.

Leakage and Injections

• Leakage: money that leaves the economy or is not spent, decreasing the money flow.
• Injection: income that is spent within the economy, increasing the money flow.
• Examples of leakage and injection in different sectors:
  • Household Sector: leakage (saving money), injection (income - wages, rent, interest, profit)
  • Firms Sector: leakage (savings by businesses), injection (investments by firms)
  • Financial Sector: leakage (taxations), injection (investments)
  • Government Sector: leakage (taxation), injection (government spending)
  • Overseas Sector: leakage (imports), injection (exports)

Gross Domestic Product (GDP)

• GDP is the total value of goods produced and services provided in a country during one year.
• Economic growth is measured by the percentage change in GDP.

Equilibrium

• Market equilibrium is the situation where the quantity supplied and the quantity demanded of a particular product are equal.
• Equilibrium occurs at the point where the demand and supply curves intersect.
• Changes to equilibrium can result from:
  • Shifts in the demand and supply curves
  • Changes to the level of efficiency in the production process
  • Changes to the cost of production
  • Change in the number of suppliers
  • Expected future prices
  • Climatic conditions