Topics in EconomicsAdvantages of Inflation Disadvantages of Inflation Concept of Inflation in Economics Scheme of work for Economics, SS1, First Term Scheme of work for Economics, SS1, Second Term Scheme of Work for Economics, SS1, Third Term Functions of the Wholesaler Advantages and Disadvantages of the Wholesaler Wholesale Market: Who is a Wholesaler? Characteristics of the Wholesaler Retail Market: Who is a Retailer and Examples of Retailers Market: Types of Market Market - What is a Market in Economics? Elasticity of Supply: Types of Supply Elasticity Supply Elasticity: Elasticity of Supply explained Demand Schedule - Types of Demand Schedule Demand: What is Demand? Law of Demand Concept and Types of Cost Supply, Supply Curve and Law of Supply What is a Black Market, Its advantages and disadvantages
Academic Questions in Economics
According to economists, a market refers to a/an _____ comprising of various buyers and sellers carrying out business transactions.
C. Entire area
D. Online platform
Primary market is a type of market based on _____.
A. Market structure
D. Commodities bought and sold
E. Channel of distribution
F. Internet and world wide web
The above diagram on the quantity supplied against a change in price is _____.
C. Perfectly Elastic
D. Perfectly Inelastic
E. Zero Elastic
F. Unitary Elastic
The rate at which an increase in the price of a product translate into the product's increased production and availability in the market is termed _____.
C. Demand Elasticity
D. Supply Elasticity
E. Demand Curve
F. Supply Curve
Concerning demand curve, which of the following statement is incorrect?
A. It is a graphical represention of a table showing the price of commodities and quantity demanded
B. It can be an individual demand curve
C. The x-axis shows the price of commodities
D. The price and quantity demanded are expressed on different axis of the graph
E. It can be a market demand curve
F. All the options are correct
A table that shows the price of a commodity and the quantity demanded is termed _____.
A. Price table
B. Demand table
C. Demanded-price table
D. Demand preference table
E. Demand graph
F. Demand schedule
The concept of Ceteris Paribus Assumption in economics states that _____.
A. Supply and Demand are antagonistic
B. When given two choice of similar products with the same price (assuming all other factors are constant), you will prefer to buy that with a lower price
C. Supply and Demand are agonistic
D. When given two choice of dissimilar products with the same price (assuming all other factors are constant), you will prefer to buy that which you need most
E. When given two choice of similar products with the different prices (assuming all other factors are constant), you will prefer to buy that with a lower price
F. When given two choice of dissimilar products with the different prices (assuming all other factors are constant), you will prefer to buy that with a lower price
The willingness of a person to buy a specific quantity of goods or services at a given price and time is termed _____.
A. Scale of preference
B. Economies of scale
C. Opportunity Cost
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The wholesalers are traders that act as a link between the producers or manufacturers and the retailers. For this reason, they may also be referred to as the intermediary or middleman.
By definition, the wholesaler is a trader that buys goods in large quantities from the producers (or manufacturers) and sells lesser quantities to the retailers.
The wholesaler performs the following functions:
The wholesaler will typically own or rent a storage facility to preserve the goods which he/she buys (in large quantities) from the manufacturers.
The use of storage facility is crucial to the wholesaler's business because he/she may end up selling the goods purchased from the producer after some period of time. To this end, the wholesaler will need a storage facility to keep such goods intact.
Note: The term wharehouse describes the place where the wholesalers keep large quantities of goods.
The wholesalers buys goods from the manufacturers and distributes them to other locations. Through this process, they expand the market for such product.
As an instance, one of the appliances in your home (or even your phone) may not be manufactured in your country or state. It is in fact the distributive function of the wholesaler that gets those products into your country or state.
It is the duty of the wholesalers to provide transport facilities in order to move goods from the producers' factory to various warehouses (owned or rented by the wholesaler) and from these warehouses to the retailers location.
The goods are transported in bulk quantities by the wholesaler in order to minimize the cost of transport.
Note: In most cases, the wholesaler will own the transport facilities but sometimes, they may be rented.
The wholesaler always function as a middleman between the producers and the retailers. He buys goods in large quantities from the producers and sells in smaller quantities to the retailers.
The wholesaler provides useful and valuable information to the producers and retailers.
The wholesalers are usually associated with the bulk purchase of a specific type of a product from a manufacturer (or a few related products from one or more manufacturers).
The wholesalers are very knowledgeable on the products they sell and as such are able to deal with issues concerning such products.
The wholesalers are likely to pay in advance for the manufacturer's product since they buy in large quantities.
Note: Since the wholesaler make payments in advance, this will aid the producers to better understand the level of demand for their products.
Conversely, the wholesalers will accept to sell their products on credit to the retailers. They do this in order to promote the product and its sales. Retailers who receive products on credit will make payments after sales have been made.
The wholesalers are known to sell goods at a stable price in accordance to what they had purchased from the manufacturers. They are able to achieve this because they buy goods in large quantities; and will therefore sell at similar prices to the retailers.
If the cost of production increases from the ends of the producers, the wholesalers will buy at a higher price and sell at an increased but stable price to the retailers. The different retailers will therefore sell at a similar price to the final consumers since they all bought the specific goods from the wholesaler. For instance, sachet Peak Milk will sell at similar prices at various retail stores.
Although the producers, wholesalers and retailers are also risk bearers with regards to the sale of a product, the wholesalers will in addition act as a shock absorber especially in the movement and distribution of goods.
Also, due to unforeseen circumstances, the demand of goods may change (negatively) and the wholesalers will have to bear this probable risk.
Note: The wholesaler takes upon himself or herself the risk of damage during the process of moving goods (in transit) and their storage.
Another instance of risk shouldered by the wholesalers will come in the form of bad debts, especially by the retailers who got goods on credits and are unable to pay.
Similarly, the wholesalers may get substandard goods from the producers after making payments in advance. That's also a form of bad debt.
Certain wholesalers will need to assemble and brand the goods purchased from the manufacturers.
The wholesalers may also put their trademark, logo or brand name after branding and packaging had been done.
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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.
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Amazing facts in Economics
NOTABLE POINTS IN Economics
A Black market is said to take place when there is illegal buying and selling of goods and services.
Black markets usually take place outside the government's rader and without government's knowledge so as to avoid tax or any other government regulations.
Black market presents the avenue for government prohibited goods like hard drugs, war weapons and firearms to be bought by criminals.
A black market can also occur on the web for cyber criminals or those who are involved in computer hacking. To achieve their malicious aim, these individuals will go into the dark web and purchase or rent their respective hacking tools for a fee. Normally, payments are made in crypto currencies.
However, a black market isn't generally considered as bad. Infact, it has its advantages and disadvantages.
Below are some advantages of black market:
Goods and services are sold at a cheaper price.
It helps some people make plenty of money.
The illegal sales of human organs, for example, the sale of human kidneys have aided in saving some lives.
Some people actually depend on black market for their daily bread.
Some of the proceeds from black market may been utilized towards the economic growth of a Nation. For instance, schools and hospitals had been from money made from black market.
The law of supply states that:
The quantity of the supplied services or goods will increase as the price increases and they will decrease as the price decreases provided all other factors remain constant.
These constant factors are very important when stating the supply law. They include:
The price of Input resources
The kind of technology used during production
The number of suppliers
The number of buyers; and so on.
A graph that shows the relationship between the price of a product or service, and its quantity supplied is the supply curve.
Supply curve can be defined as a graphical representation of the direct relationship between the prices of goods and services and the quantity supplied (of such goods and services) within a particular period of time provided all other factors remain constant.
Consider the table below:
Needs / Wants
The above table shows us what a scale of preference would look like.
A scale of preference can be defined as the list of a person's needs or wants written in an order of importance.
You will observe that the person puts his most important needs or wants at the top of the list. Further down the list are his less important needs.
Now, let's imagine that this individual has 170,000 Naira to spend. According to the above scale of preference, the followings can be deduced;
A phone will be considered to be the most important; and it costs 50,000. He buys the phone.
A console game according to this person is next in importance; and it costs 120,000. He buys the console game.
Another question worth asking is:
What happens to his other needs?
This is where the term 'Opportinity Cost comes into play.
Scale of Preference can be defined as the list of a person's needs or wants written in an order of importance. 📜✍️
When you have a limited amount of money and could only buy some of the items on your list (the top items on the list); then the remaining items that you didn't buy will be generally considered as your opportunity cost.
Opportunity cost can be defined as the value of the best alternative that a person could have achieved or bought but couldn't achieve after the best choice had been achieved.
Opportunity cost are of two types. They are: