Economy Basic Terminologies Flashcards
(22 cards)
Rivalrous goods
Private goods
Car tv all other consumer goods
Non rivalrous goods
Club goods
Wifi, toll roads
Rivalrous and non excludables
Common goods ( coal petroleum
Non rivalrous and non excludables
Public goods (national defence)
Essential economic activities
Production
Consumption
Capital formation
Four sectors of economy
Firm
Govt
Household
External sector
Four sectors of economy
Firm
Govt
Household
External sector
Central problems of economy
How to produce
What to produce
For whom to produce
Sectors of economy
Primary - extraction of raw material and natural resources ( agri,forestry, fishing, animal husbandry)
Secondary - all manufacturing and construction activities, electricity,gas,water supply, utility services
Tertiary - IT services, transportation, tourism, storage, communication, banking
Quarternary - intellectual or knowledge based
Quinary- high level decision making
Indifference curve
Convex to origin
Different combinations of two goods demanded
Engel curve
Locus of all equilibrium points
Quantity demanded based on income level
Kuznet curve
Relationship between inequality and economic growth
Shape invertd u
Perfect competition
Large number of buyer and seller
Sell identical goods
Price decided by Market
Agriculture market
Monopoly
Single seller
No close substitute produced
Restriction on market entry
Railway in india
Monopolistic competition
Many firms sell products but not perfect substitutes
Toothpaste, soap
Oligopoly
Competition among few
Cement,steel, automobile
Duopoly
Two firms dominate the market
Monopsony
Single buyer and no close substitute
Types of goods
Substitute goods
Complementary
Normal
Inferior
Giffen
Veblen
Giffen goods
Consume more when price increase
Pareto efficiency
Impossible to make someone better off without making other worse off
Paradox pf thrift
Personal savings can be detrimental to economic growth
