Microeconomics Revision cards

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