Alfred Ajibola
- 10th September, 2025 @ 09:55 AM
Topics in Economics
Forms of Socialism in Government Advantages and Disadvantages of Capitalism What is Capitalism? Characteristics of Capitalism Types of price elasticity of demand Types of elasticity of demand Types of capital market: Primary market and secondary market Capital market explained with its functions Basic tools for economic analysis: Graphs explained with its characteristics and importance Basic tools for economic analysis: Tables explained with its characteristics and importance Factors affecting population in economics Advantages 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 WholesalerAcademic Questions in Economics
_____ is defined as a gradual and sustained rise in price level of goods and services in relation to their availability.
A. Basis Point Rate
B. Hike Rate
C. Elastic Supply
D. Elasticity of Price
E. Price Inflation
F. Aggregate Supply
The wholesalers can bring about an economy of scale.
A. True
B. False
Which of the following statement isn't a characteristics of the wholesaler?
A. They may have to operate in specific areas or regions accorded them by the producer
B. They are often popular in the line of goods they supply
C. They are not risk bearers
D. They have good storage facilities
E. They often pay for goods supplied by the manufacturers in advance
F. They usually have business agents or brokers
The wholesalers act as the middlemen in supply chain.
A. True
B. False
Large retailers who buy directly from manufacturers are termed as _____.
A. Wholesale Retailers
B. Certified Retailers
C. Codified Retailers
D. Commodity Retailers
E. Manufacturers Retailer
F. Conspicuous Retailers
_____ is a market whereby the sellers buy goods in lesser quantities from the wholesalers and sells in bits to the final consumers.
A. Commodity
B. Retail
C. Wholesale
D. Labour
E. Common
F. General
Which of the following is not a financial market?
A. Money Market
B. Bond Market
C. Foreign Exchange Market
D. Virtual Market
E. Capital Market
F. Stock Exchange Market
A _____ market provides a platform whereby job seekers link up with employers in an attempt to be hired.
A. Wholesale market
B. Bond market
C. Physical market
D. Virtual market
E. Factor Market
F. Labor Market
Capitalism, or a capitalist economy is defined as an economic and political system whereby private individuals and cooperations are in control of economic production, alongside the means and factors of production, with the ultimate aim to make and maximize profit.
Recall that capitalism is just one of the economic systems practiced by various countries. Apart from the capitalist economy, other economic systems will include socialism and a mixed economy.
Examples of countries where capitalism is operated include the USA, France, Germany Japan, Canada, New Zealand, Australia, Israel etc.
Recall that the economic framework of any nation will always address three fundamental economic problems. These are:
What to produce?
How to produce?
For whom to produce?
Please read the introduction to capitalism explained with its characteristics here.
In this article, we will focus on the advantages and disadvantages of capitalism.
It encourages innovation and efficiency. This is a function of the capitalist competition which propels businesses to reduce waste, as well as cut unnecessary costs.
It offers consumers a choice of goods and services. Simply put, consumers have a wide variety of goods and services to choose from. Please read on functions of the wholesaler here.
Capitalism encourages competition in the price and quality of goods and services. This is true since a variety of businesses are set up in capitalist states. Some of these business may produce similar products, or render similar services, thus promoting competition.
There are massive technological advancements in economies where capitalism is practiced. Please read on the concept of technology and various definitions here.ere
Capitalist societies encourage individuals toward starting a career (or business) of their choice, especially when loan facilities are made available.
Although it may increase the chances of business risk; importantly, it also increases the respective opportunities of making profit in business. You can read on franchise here.
Investment and reinvestment in a capitalist economy drives economic growth and subsequently, raises living standards.
Since there is a decentralized decision-making system in capitalist societies, it therefore provides people with freedom and incentives for their deliberate and conscious hard work. Please read on the concept of outbound marketing here.
Production and marketing decisions are made by millions of individuals and businesses, and not necessary the government.
Capitalist systems may encourage international trade and cooperation.
Please read on foreign trade here.
There is income inequality since wealth often become concentrated in the hands of only few individuals. For this reason, capitalism widens the gap between the rich and the poor.
It can lead to a monopolistic market especially when large corporations dominate the markets, reducing consumer choice. This may invariably lead to inflation. Please read on the advantages of inflation here.
Social welfare of workers may not be considered. This is true since business owners may prioritize profits over fair wages and working conditions, thus exploiting workers and exposing them to the risk of infections and accidents in the process.
Capitalism may lead to job insecurity of workers, especially in industries with high competition.
Community service may become neglected especially when companies prioritize immediate profits over long-term sustainability. Please read more on community service here.
Capitalist market may lead to atmospheric pollution since advanced machine are often employed. In this regard, if there isn't any proper regulation, businesses may ignore environmental costs. Please read on air pollution and its effects here.
Capitalist economies are prone to fluctuations. For this reason, they often have periods of rapid growth and financial boom, followed by recessions. This instability can harm businesses and workers alike when not properly managed.
Frequent advertising in a capitalist economy may influence consumers to buy goods based on marketing, rather than their real needs. Please read on advertising and types of advertising here.
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Amazing facts in Economics
Notable points in Economics
A unitary elasticity of supply is seen when a change in price brings about a corresponding and proportional change in the quantity of goods or services supplied.
The graph below shows a unit elasticity of supply:
Below is an instance of a unitary elasticity of supply:
If a 100% increase in the price of wheat translates into a 100% increase in the production and supply of wheat, then the supply elasticity is said to be unitary elastic and its value is equal to 1.
Unitary elasticity is always equal to 1, that is: Es = 1
The supply curve runs diagonally and will pass through the center.
Supply elasticity is defined as the rate at which an increase in price of goods translates into its increased production and availability in the market. Supply elasticity is also termed as price elasticity of supply.
Consider the statements below:
If a 100% increase in the price of rice translates into a 100% increase in the production and supply of rice, the supply elasticity is said to be unitary elastic and its value is equal to 1.
If a 100% increase in the price of rice translates into a 50% increase in the production and supply (quantity) of rice, the supply elasticity is said to be inelastic and its value will be greater than zero and less than 1. In this case, the exact value is 0.5: (value of change in the quantity of rice divided by value of change in price of rice = 50/100 = 0.5).
The individual demand schedule is a table that shows the demand of a commodity that an individual (consumer) purchased at various prices, and at a particular time.
The table below shows an individual demand schedule:
|
Price in Naira (of a tuber of yam) |
Quantity demanded (per week) |
|
500 |
5 |
|
400 |
10 |
|
300 |
15 |
|
200 |
20 |
|
100 |
25 |
The market demand schedule is also referred to as an aggregate demand schedule, total demand schedule or composite demand schedule.
This is a table that shows the different commodities purchased by all the consumers or customers in the market.
The market demand schedule is the summation of the individual demand schedules, showing the demand of different customers for a commodity at a particular price. It is shown in the table below:
|
Unit price of commodity (Naira) |
Quantity demanded by consumer A (QA) |
Quantity demanded by consumer A (QB) |
Market demand (QA + QB) |
|
50 |
20 |
15 |
35 |
|
40 |
40 |
30 |
70 |
|
30 |
60 |
45 |
105 |
|
20 |
80 |
60 |
140 |
|
10 |
100 |
75 |
175 |
From the above table, notice that when the unit price of the commodity was 50 Naira, consumer A demanded 20 quantities while consumer B demanded 15 quantities.
Below are definitions of demand from the perspective of some notable professors:
The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time.
Professor Mayers
Demand is the various quantities of goods that would be purchased per time period at different prices in a given market.
Professor Hibdon
The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price.
Professor Benham
Generally, demand is defined as the willingness of a person, buyer or consumer to buy a specific quantity of goods or service at a given price and time.
From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are:
Quantity of Goods Demanded
Price
Time