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24 Cards in this Set
- Front
- Back
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measurement for PES elastic |
more than 1 |
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measurement of PES inelastic |
0-1 |
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measurement of ped elastic |
more than 1 |
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measurement of ped inelastic |
less than 1 |
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measurement for unit ped |
1 |
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inferior good YED |
negative |
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normal good YED |
positive |
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measurement for XED substitutes |
positive |
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measurement for complimentary goods XED |
negative |
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measurement for independent goods |
0 |
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acronym for influences of PES |
Flexible, resources quickly changed Availability of resources Storability Time period, short run inelastic Production time |
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acronyms for PED |
Time period Habit forming Income spent Postpone purchase Substitutes |
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advantages of specialisation and divisible of labour |
increases productivity workers can specialise in skills they are best suited to suits a modern technology as it encourages exchange |
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disadvantages of specialisation and divisible of labour |
work becomes repetitive, demotivated over specialisation NE England, coal mines |
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what economist promotes free market |
adam smith |
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advantages of free market (5) |
-individuals act in own self interest. S&D determines price -no expensive central planning -invective to work harder -competition keeps prices down -consumer sovereignty.firms produce for consumers not central planners |
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problems of free market(6) |
-widen inequality gap -negative externalities -merit and public good not produced -demerit goods overproduced -competition is limited as large monopoly powers -encourage self interest, materialism, greed and selfishness |
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what economist os associated with command economies |
karl marx |
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benefits of command (3) |
-redistribution of wealth -merit goods are provided sufficiently -redirect resources towards lomg term goals e.g infrastructure =economic growth |
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problems of command (3) |
-goods fall in quality as no competition -less incentive to work -undemocratic people told what to do |
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why might consumers not act rationally(3) |
-habitual behavior , persistent patterns of behaviour -consumer weakness at computation -don't know the best deal -influences of other people's behaviours -herd behaviour animal spirits |
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causes of economic failure (4) |
distortion of price signals unintended consequences excessive administrative costs information gaps |
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what is cost benefit analysis |
Form of investment appraisal . method of assessing the full social costs and benefit- including fhe external costs and benefits of an investment project |
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disadvantages of CBA |
external costs are difficult to measure and give a monetary value there are administrative costs and delays e.g Heathrow T5 £80mn and 4 years future costs and benefits are difficult to measure (how much will deforestation hurt future generations |
