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Criado por tyrasirandula
mais de 10 anos atrás
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Questão | Responda |
Scarcity | When there are insufficient resources to provide for everyone’s wants. |
Opportunity Cost | The next best alternative foregone. |
A renewable source | One whose stock level can be maintained over a period of time. |
A non-renewable source | One whose stock level is decreased over time as it is consumed. |
PPF | Shows the maximum potential level of output an economy can produce for two goods or services, given all its current resources/technology. |
Factors of production | Are inputs used in production of goods and services. |
Specialisation | When an individual/firm/country concentrates on the production of a limited range of goods and services. |
Division of labour | A form of specialisation where individuals concentrate on the production of a particular good or service. |
Free market economy | All resources are allocated by the price mechanism. No government intervention. |
Mixed economy | Some resources are allocated by the price mechanism, and some by the government. |
A positive statement | Are concerned with facts, there is a scientific approach, and can be tested true or false. |
A normative statement | Based on value judgement, there is no scientific approach. |
Market | Where buyers and sellers come in contact for the purpose of exchange. |
Demand | The quantity of a good or service purchased at a given price over a given time period. |
PED | Percentage change in quantity demanded/ Percentage change in price |
Total Revenue | The total revenue a firm receives from selling a given quantity of goods or services. |
XED | Percentage change in demand for good B/ Percentage change in price for good A |
Substitute goods | Goods which are in competitive demand. |
Complimentary goods | Goods which are in joint demand. |
YED | Percentage change in quantity demanded/ Percentage change in real income |
Normal goods | A good where a rise in income causes a rise in demand. |
Inferior goods | A good where a rise in income causes a fall in demand. |
Supply | The quantity of a good or service that firms are willing to sell at a given price over a given time. |
PES | Percentage change in quantity supplied/ Percentage change in price of a good |
Equilibrium | When there is balance in a market, quantity demanded = quantity supplied. |
Consumer surplus | The extra amount of money consumers are prepared to pay for a good or service about what they actually pay. |
Producer surplus | The extra amount of money paid to producers above what they are willing to accept for a good or service. |
Price mechanism | The way price responds to changes in demand or supply for a product or factor input so that a new equilibrium position is reached in a market. |
A direct tax | Is a tax levied directly on an individual or organisation, e.g. income tax, corporation tax. |
An indirect tax | Is a tax levied on the purchase on good or services, e.g. VAT. |
Subsidy | A grant (provided by the government) to encourage suppliers to increase production of a good or service, leading to a fall in price. |
Derived demand | Demand which is derived from the demand for the goods or services it makes. |
National Minimum Wage | The legal minimum hourly rate of pay an employer can pay its workers. |
Market Failure | When the price mechanism causes an inefficient allocation of resources, the forces of demand and supply causes a net welfare loss. |
Externalities | The costs or benefits which are external to an exchange. |
Private costs | Costs which are internal to the firm/individual. |
Social costs | Private costs + external costs |
External costs | A negative third party effect. |
External benefits | A positive third party effect. |
Private benefits | Benefits which are internal to the firm/individual. |
Social benefits | Private benefits + social benefits |
Triangle of welfare loss | The excess of social costs over social benefits. |
Triangle of welfare gain | The excess of social benefits over social costs. |
Public goods | Goods which are non-rival, and non-excludable. |
Non-rival | As more people consume a good and enjoy its benefits, it does not reduce the amount available to others. |
Non-excludability | Once a good has been produced for the benefit of one person, it is impossible to stop others from benefitting. Characteristic of the free-rider problem. |
Mobility of labour | The ability of workers to change from one job to another. |
Geographical immobility | The obstacles which prevent labour from moving from one area to another to find work. |
Occupational immobility | The obstacles which prevent labour from changing their type of occupation to find work. |
Commodities | Raw materials used in the production of goods. |
Emission Trading System | An attempt to limit greenhouse gas emissions from heavy industry. |
Buffer stock schemes | Attempts to reduce price fluctuations of a commodity and stabilise producer incomes. |
Government failure | Occurs when government intervention leads to a net welfare loss/ where the government causes a misallocation of resources in a market. |
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