Definitions

Question 1

productivity

Answer 1

output per unit input
how efficiently a firm/economy is producing its output

Question 1

free rider problem

Answer 1

one a public good is provided it is impossible to stop someone who hasn’t paid from benefiting from it
eg road cleaners

Question 2

concentration ratio

Answer 2

the collective market share of the largest firms in the industry

Question 3

pure public goods

Answer 3

non excludable
non rival

Question 4

non excludable

Answer 4

the benefits of consuming the good cannot be confined to the individual that has paid

Question 5

non rival

Answer 5

q of the good does not diminish upon consumption

Question 6

pure public goods eg

Answer 6

armed forces
flood defence
roads
road signs
traffic lights
street lights

Question 7

+/- externalities

Answer 7

benefits/costs to 3rd parties as a result of the actions of a separate agent in the production or consumption of a good/service

Question 8

human capital

Answer 8

how valuable a person is in the workforce due to their education, training and experience

Question 9

marginal cost of labour

Answer 9

cost of hiring an additional worker
in PC market MCL=market eqm W

Question 10

monopsony

Answer 10

market w a single buyer

Question 11

collective bargaining

Answer 11

where a tu negotiates w an employer on the individuals’ behalf

Question 12

specialisation

Answer 12

concentration of production on a narrow range of goods/services

Question 13

dynamic efficiency

Answer 13

reinvestments of LR SN profit to increase efficiency

Question 14

gov failure

Answer 14

when the costs of gov intervention outweigh the benefits of gov intervention leading to a greater misallocation of resources and a net social welfare loss

Question 15

behavioural econ

Answer 15

looks at social, psychological and emotional factors on the individuals in an economy

Question 16

MC

Answer 16

cost of increasing output by one unit
only affected by VC

Question 17

law of diminishing marginal utility

Answer 17

for each additional unit of a good consumed the marginal utility gained decreases

Question 18

elasticity of labour d curve

Answer 18

measures the responsiveness of labour demanded given a change in wage rate

Question 19

TU

Answer 19

an organisation which represents the interests of a group of workers

Question 20

AR

Answer 20

average revenue per unit sold

Question 21

productive efficiency

Answer 21

using up all FoPs to their max level
on the ppf
producing at the lowest point on the SRAC curve (AC=MC)

Question 22

regulation

Answer 22

a rule/law enacted by gov that must be followed by economic agents to encourage a change in their behaviour

Question 23

deregulation

Answer 23

gov reduce/remove legal barriers to entry in an industry

Question 24

P mechanism

Answer 24

change in d/s of a g/s leads to a change in p leading to a change in q bought/sold until d=s

Question 25

specific taxes

Answer 25

fixed amount charged per unit no matter what cost

Question 26

allocative efficiency

Answer 26

optimal distribution of g/s taking consumer preferences into account
p=mc and d=s

Question 27

tragedy of the commons

Answer 27

private producers act according to their self interest and unsustainably keep exploiting CAR until eventually leading to a depletion of that resource

Question 28

bureaucracy

Answer 28

enforcement of rules + regulations by gov

Question 29

Public private partnership

Answer 29

private firm works w gov to provide a service/build something

Question 30

monopoly power

Answer 30

ability of a firm to influence the p of a particular g/s in a market

Question 31

economic activity

Answer 31

combining the FoPs to create outputs that people can consume

Question 32

production

Answer 32

manufacturing something in order to sell it

Question 33

cost benefit analysis

Answer 33

decision making tool accounting for the SC and SB of a project over time to establish a ne present value

Question 34

law of diminishing returns

Answer 34

if one variable fop increases while others stay fixed eventually mp from the variable factor will decrease

Question 35

return to scale

Answer 35

how output changes when all factor inputs increase by the same proportion

Question 36

dumping

Answer 36

sale of a good below costs of production in other countries

Question 37

Mp

Answer 37

The additional output produced by adding one more unit of a factor not

Question 38

Cross subsidisation

Answer 38

Using profit making parts of business to subside loss making parts allowing them to remain available to consumers

Question 39

Margin

Answer 39

Change in one variable caused by an increase of one unit of another variable

Question 40

Discrimination

Answer 40

The unjust different treatment of diff categories of people