Economics: Retail and Labour Markets

Study Notes

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.

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.

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 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.

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: 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)

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.

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