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85 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Opportunity cost |
The next best alternative foregone |
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Production possibility frontier |
A curve which shows a max output of two goods when all resources of economy is fully employed |
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Complementary good |
A good whose related to use of a paired good |
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Derived demand |
Where demand for a factor of production Occurs as a result of the demand for another final good |
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Substitute good |
Different goods that satisfy the same needs to consumer so could be replaced |
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Composite demand |
Demand for a commodity that provides multiple uses |
Eg sheep----meat or wool |
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Joint supply |
Product/manufacturing process that can result in more than one output |
Cow---beef or Leather |
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Division of Labour |
Where production process is broken down into different tasks and labour allocated to each task |
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Demand |
Amount of consumers are willing and able to pay for an item |
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Supply |
The amount that firms are willing and able to supply at each price |
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Ped |
%change in qd/ % change in p |
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Xed |
%change in qd for good A/ %change in price for good B |
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Pes |
% change in QS / % change in price |
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Tax |
Is a compulsory transfer of money from individual/organisation to the gvt |
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Advelorem tax |
Indirect tax and expressed as a proportion of the final price |
Eg vat |
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Specific tax |
Indirect tax expressed as an absolute sum of money per unit of good |
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Price elastic |
As supply can effectively respond to fluctuations in price |
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Yed |
% change in qd/ % change in Y |
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Public good |
Non excludable, non rivalrous, non reject able |
Err |
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Private good |
Once consumed by one person cannot be consumed by anybody else |
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Consumer surplus |
Difference between the price the consumer is willing to pay and what they actually pay for a good |
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Producer surplus |
The difference between the price the producer is willing to cell the good for and the price they actually recieve |
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Producer |
Difference between price the producer is willing to sell good for and they prove they actually recieve |
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Producer |
Difference between price the producer is willing to sell good for and they prove they actually recieve |
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Normal good |
Demand rises as real income rise |
Positive result |
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Inferior good |
Demand falls as income rises |
Negative result |
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Scarcity |
Can only obtain a limited amount of resources at any moment in time |
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Scarcity |
Can only obtain a limited amount of resources at any moment in time |
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Subsidies |
Payment by the gvt to producers of a good |
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Black market |
Illegal market in which market prices is higher than legally imposed price ceiling |
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Black market |
Illegal market in which market prices is higher than legally imposed price ceiling |
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Max price |
Gvt can set a max price to prevent market price from rising above a certain level |
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EG |
Increase in reAl gdp |
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EG |
Increase in reAl gdp |
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Min price |
Price floor below which prevents employees paying an hourly wage less than the set amount |
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EG |
Increase in reAl gdp |
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Min price |
Price floor below which prevents employees paying an hourly wage less than the set amount |
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Nmw |
Legally binding wage which prevents employers paying an hourly wage less than a set amount |
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Reject able |
Can't be Force d to consume an item |
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Demerit good |
Goods that are over provided by the market mechanisms Eg alcohol tobacco |
Normally bad for you |
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Quasi public goods |
Near public good Semi non rival eg car park of beach semi excludable eg road tolls |
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Positive stateemnt |
Scientifically proven Objective statement |
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Normative statement |
Valued judgement Non scientific Subjective |
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Mixed economy |
Partly allocated by gvt partly by price mechanism |
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External benefit |
Positive 3rd party effect |
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-Ve externalities |
Social costs of economic action are greater than private costs |
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+ve externalities |
Social benefits are greater than private benefits |
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Imperfect info |
Producer knows more than consumer |
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Occupational immobility |
Worker unable to switch to another type of job |
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Moral hazard |
When party with superior knowledge alter their behaviours to benefit themselves while imposing costs on those with inferior knowledge |
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Time lags |
Gvt is often slow to adapt change due to rules and regs that it must follow |
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Geographical immobility |
Where there are barriers to worker moving from one area to another to take up employment |
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Immobility of labour |
Barrier and limitations on the ability of worker to move between different past of rn country or occupations |
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Market failure |
When a market fails to allocate resources efficiently |
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Environmental taxes |
The gvt could impose tax on the polluting firms in order to internalise externalities |
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Renewable resource |
Resources that can be replenished and sustained for further generations |
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Sustainable resources |
Being used or consumed on produced at a rate that will ensure it is available for future generations |
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Tradable permits |
Issued to forms up to a certain limit by the gvt any pollution above the limit is subject to fines |
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Excludability |
Stopped from having a good |
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Nmw |
Legally binding wage which prevents employers paying an hourly wage less than a set amount |
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Reject able |
Can't be Force d to consume an item |
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Demerit good |
Goods that are over provided by the market mechanisms Eg alcohol tobacco |
Normally bad for you |
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Quasi public goods |
Near public good Semi non rival eg car park of beach semi excludable eg road tolls |
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Positive stateemnt |
Scientifically proven Objective statement |
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Normative statement |
Valued judgement Non scientific Subjective |
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Mixed economy |
Partly allocated by gvt partly by price mechanism |
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External benefit |
Positive 3rd party effect |
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-Ve externalities |
Social costs of economic action are greater than private costs |
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+ve externalities |
Social benefits are greater than private benefits |
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Imperfect info |
Producer knows more than consumer |
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Occupational immobility |
Worker unable to switch to another type of job |
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Moral hazard |
When party with superior knowledge alter their behaviours to benefit themselves while imposing costs on those with inferior knowledge |
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Time lags |
Gvt is often slow to adapt change due to rules and regs that it must follow |
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Conflicting objectives |
Every decision make by the gvt has an opportunity cost
Sometimes a decision is made where the welfare gain
from the alternative foregone
would have been higher |
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Geographical immobility |
Where there are barriers to worker moving from one area to another to take up employment |
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Immobility of labour |
Barrier and limitations on the ability of worker to move between different past of rn country or occupations |
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Market failure |
When a market fails to allocate resources efficiently |
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Environmental taxes |
The gvt could impose tax on the polluting firms in order to internalise externalities |
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Renewable resource |
Resources that can be replenished and sustained for further generations |
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Sustainable resources |
Being used or consumed on produced at a rate that will ensure it is available for future generations |
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Tradable permits |
Issued to forms up to a certain limit by the gvt any pollution above the limit is subject to fines |
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Excludability |
Stopped from having a good |
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Tr |
Selling price x quantity sold |
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Tr |
Selling price x quantity sold |
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Buffer stock scheme |
Organisation attempts to smooth out fluctuations in prices of agricultural goods through the purchase and sale of stocks |
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