AS - Level Economics Flashcards on Microeconomics Revision cards, created by gen lebus on 31/03/2015.
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Created by gen lebus
over 9 years ago
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Created by gen lebus
over 9 years ago
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What does the Economic system ask?
It is the main decisions of an economy.
Trade off
Resource allocation
What is the economic problem?
What are the Factors of Production?
What is the income of the Factors of Production?
What are the economic objectives for consumers, workers, firms and governments?
What is the danger of increasing production?
What is a positive statement?
What is a Normative Statement?
What is the central purpose of an economy?
How do we increase economic welfare of citizens?
What is a successful economy?
What does Economics Study?
How are we resources?
What choices do consumers have to make within an economy?
What do workers want in an economy?
What do Firms want in an economy?
What do the government do in an economy?
What happens if consumers change their wants?
What is a Production Possibility Frontier?
What is the principle of diminishing returns?
What can cause a shift in the PPF?
What are the functions of money?
Problems money solved
Price is one of the main determinants of demand, but what are the non-price determinants of demand?
What are the non-price determinants of Supply?
What is the equilibrium point?
What is the equilibrium/market clearing price?
What do prices do?
What iis elasticity?
What is PED?
What is the formula for PED?
What does PED=0 mean/look like?
What does PED = 0-1 mean/look like?
What does PED=1 mean/look like?
What does PED >1 mean?
What influences Price Elasticity of demand?
What are the benefits of specialisation?
What are the benefits of division of labour?
What are the benefits of increased productivity?
What is the cost-benefit principle?
What are rational decision makers?
What should producers do with elastic demand to increase total revenue?
What should producers do with inelastic demand to increase total revenue?
What happens with indirect tax with elastic PED?
What happens with indirect tax when demand in inelastic?
What is income elasticity of demand?
What is the formula for YED?
Are necessities income elastic or inelastic?
Are luxuries income elastic or income inelastic?
What is a normal good?
What is an inferior good?
What is cross elasticity of demand?
What is the formula for XED?
What are complementary goods?
What are substitute goods?
What is a strong, weak and no relationship between goods in competitive or complementary demand?
What happens when a consumer becomes a habitual purchaser of a product?
What is price elasticity of supply?
What is the formula for PES?
If supply is elastic...
If supply is inelastic...
Factors affecting PES
What 3 roles does the price mechanism play in a market?
What does signallng function mean?
What does transmittance of preferences mean?
What does rationing function mean?
What happens with decision making in a market economy system?
Why does market failure occur (price mechanism)
Government intervention can...
What are the benefits of specialisation?
What does specialisation need to be paired with if it is to be effective?
Benefits of high productivity
Economies of Scale
Fixed costs
Variable costs
Average total cost
What are the internal economies of scale?
Internal Economies of scale: Technical
Financial Internal Economies of Scale
Marketing Internal Economies of Scale
Purchasing
Managerial Internal Economiees of Scale.
Network internal economies of scale
External economies of scale
Diseconomies of scale
What are the three Cs?
How to avoid Diseconomies of scale
Do economies of sccale always improve consumer welfare?
Production
Specialisation
Division of Labour
Productivity
Labour productivity
Productive efficiency
Social Costs
Social Benefits
What are positive externalities?
What are negative externalities?
Example of negative externality
Example of positive externality
Why do merit goods cause markekt failure?
Why are de-merit goods a form of market failure?
Government intervenes to ensure...
Market Failure
Allocative efficiency
Complete market failure
Partial markt failure
Information failure
Allocative iinefficient
Asymmmetric information
Factor immobility
What are the 2 main types of factor immobility?
Occupational immobility
Geographical immobility
Merit good
Demerit good
Under provision of merit goods and overprovision of demerit goods may result from...
Joint Supply
Composite Demand
Complementary demand
Derived demand
Sustitute Demand
Inequality
What happens if people don't have sufficient economic votes to have an impact on the market system?
What are the problems of inequality?
Private good
Public goods
Why are pure public goods not provided by the private sector?
Why are public and private goods market failure?
What can the government do to correct public and private good market failure?
What are quasi-public goods?
What is a competitive market?
Benefits of competitive market?
What is a monopoly?
Monopoly characteristics
Problems of monopoly
What are the main problems with monopoly?
What are the benefits of monopoly?
What are the main characteristics of a monopoly?
What are laissez-faire economics?
Why do the government intervene in a free market economy?
What are minimum prices used to correct?
How does minimum prices work?
Advantages of minimum price
Disadvantages of minimum price
What are maximum prices used to correct?
How does maximum prices work?
Advantages of maximum price
Disadvantages
What are pollution permits used to correct?
How does it work?
Advantages of a pollution permit
What are the disadvantages of pollution permits?
What is provision of information used to correct?
Hoow does provision of information work?
Advantages of provision of information
Disadvantages of provision of information.
Judgement of provision of information
What is government provision used to correct?
How does government provision work?
Advantages of government provision
What are the disadvantages of government provision?
What are examples of regulation?
What is regulation used to correct?
How does it work?
What are the advantages of regulation?
Disadvantages of Regulation?
What is indirect tax used to correct?
How does indirect tax work?
Advantages of indirect tax
Disadvantages of indirect tax
What are subsidies used to correct?
How do subsidies work?
What are the advantages of subsidies?
Disadvantages for subsidies
What are buffer stocks used to correct?
How do buffer stocks work?
Advantages of buffer stocks
What are the disadvantages of buffer stocks?
What is government failure?
What are the potential causes of government failure?
What is The law of uniintended consequences?
What is Government intervention and evasion?
What is Government intervention and disincentive effects?
What is Regulatory Capture?
What is political self-interest
What is policy Myopia?
What are policies based on imperfect information?
What are costs of admin and enforcement?
What are the problems of government failure?
Goods
Services
Economic welfare
Opportunity cost
Free goods
Economic Goods
Economic activity
Scarcity
Factor incomes
Factor market
Free market economy
Market
Buyers
Sellers
Supply
Planned economy
Mixed economy
Wholesale
Decoupling
Derived demand
Compposite demand
Joint demand
Price mechanism
Secondary market
Production
Income
Wealth
Absolute poverty
Relative Poverty
Demand
Effective demand
Latent demand
What are discretionary incomes?
Ostentatious consumption
Speculative demand
Supply
Producer surplus
Consumer surplus
Social efficiency
