Exam Definitions Flashcards
1
Q
Opportunity cost
A
The value of the next best alternative that is forgone when a choice is made
2
Q
Relative scarcity
A
When our wants and needs are unlimited and the resources needed to fulfil these are limited
3
Q
The value of the next best alternative that is forgone when a choice is made is known as?
A
Opportunity cost
4
Q
A situation where resources are limited compared to demand is known as?
A
Relative scarcity
5
Q
Relative prices
A
The price of one good or service in comparison to another shown in a ratio
6
Q
The price of one good or service in comparison to another shown in a ratio is known as?
A
Relative price
7
Q
The purpose of relative price is?
A
To display where resources need to be allocated
8
Q
Consumer sovereignty
A
Where consumers determine what will be produced through their choices
9
Q
Where consumers determine what will be produced through their choices is known as?
A
Consumer sovereignty
10
Q
Living standards
A
Aggregate welfare of people in a country made up of material and non material factors
11
Q
Aggregate welfare of people in a country made up of material and non material factors are known as?
A
Living standards
12
Q
Utility
A
A measure of satisfaction, happiness or wellbeing
13
Q
A measure of satisfaction, happiness or wellbeing is labeled?
A
Utility
14
Q
Ordred preferences
A
The ordering of alternatives based on their relative utility
15
Q
The ordering of alternatives based on their relative utility is known as?
A
Ordred preferences
16
Q
Present bias
A
The tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs
17
Q
The tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs is known as?
A
Present bias
18
Q
Framing
A
How options are presented through advertising
19
Q
How options are presented through advertising is known as?
A
Framing
20
Q
Positive and negative externalities
A
The positive and negative effect an activity imposes on an unrelated third party
21
Q
The positive and negative effect an activity imposes on an unrelated third party are known as?
A
Positive and negative externalities
22
Q
Nudge
A
Subtle pushes to influence people into making certain choices without incentives
23
Q
Subtle pushes to influence people into making certain choices without incentives is known as?
A
Nudge
24
Q
Bounded rationality
A
The idea that in decision-making, rationality of individuals is limited by the information they have
25
The idea that in decision-making, rationality of individuals is limited by the information they have is known as?
Bounded rationality
26
Complementary goods
A good that is used with another good
27
A good that is used with another good is known as a
Complementary good
28
Veblen good
A good where the demand rises when the price of the good increases
29
What is an example of a Veblen good?
A exclusive/prestigious house in a neighbourhood
30
A good where the demand rises when the price of the good increases is known as a
Veblen good
31
Price mechanism
The way changing market conditions influence the allocation of resources
32
The way changing market conditions influence the allocation of resources is known as?
Price mechanism
33
Price
The amount of money expected, required, or given in payment for something
34
The amount of money expected, required, or given in payment for something is known as?
Price
35
Market
Anyplace where buyers and sellers interact to exchange goods and services
36
Anyplace where buyers and sellers interact to exchange goods and services is known as a?
Market
37
Resource allocation
The process of allocating scarce factors of production among alternative areas of production
38
The process of allocating scarce factors of production among alternative areas of production is known as?
Resource allocation
39
Substitute goods
A good or service that serves the same purpose as another good or service
40
A good or service that serves the same purpose as another good or service are known as?
Substitute goods
41
Anchoring effect
The common human tendency to rely too heavily on the first piece of information offered
42
The common human tendency to rely too heavily on the first piece of information offered is known as?
The anchoring effect
43
Bounded willpower?
The fact that human beings often take actions that they know to be in conflict with their own long-term interests
44
The fact that human beings often take actions that they know to be in conflict with their own long-term interests is known as?
Bounded willpower
45
Monopoly
An industry that is dominated by one seller of a product that does not have a close substitute
46
An industry that is dominated by one seller of a product that does not have a close substitute is known as a?
Monopoly
47
Monopolistic competition
A type of imperfect competition such that many producers sell products that are differentiated from one another
48
A type of imperfect competition such that many producers sell products that are differentiated from one another is known as a?
Monopolistic competition
49
Perfect competition
A market where there are many buyers and sellers, homogenous products, freedom of entry into a market and perfect information
50
A market where there are many buyers and sellers, homogenous products, freedom of entry into a market and perfect information is known as a?
Perfect competition
51
Triple bottom line
An accounting framework with three parts which are social, environmental (or ecological) and financial
52
An accounting framework with three parts which are social, environmental (or ecological) and financial is known as the?
Triple bottom line
53
Predatory pricing
The illegal act of charging low prices in order to drive a competitor out of the market
54
The illegal act of charging low prices in order to drive a competitor out of the market is known as
Predatory pricing
55
Cartel conduct
When two or more firms agree not to compete, and join to make strategies to manipulate the market
56
When two or more firms agree not to compete, and join to make strategies to manipulate the market it is known as?
Cartel conduct
57
Law of demand
As the price of a product goes up, the demand goes down and vice versa
58
As the price of a product goes up, the demand goes down is known as the?
Law of demand
59
Law of supply
As the price of a good or service increases, there will be a increase in the quantity supplied
60
Law of demand
As the price of a product goes up, the demand goes down and vice versa
61
As the price of a product goes up, the demand goes down is known as the?
Law of demand
62
a state where economic forces such as supply and demand are balanced and in the absence of external influences is known as?
Equilibrium
63
As the price of a good or service increases, there will be a increase in the quantity supplied is known as the?
Law of supply
64
Equilibrium
A state where economic forces such as supply and demand are balanced and in the absence of external influences
65
a state where economic forces such as supply and demand are balanced and in the absence of external influences is known as?
Equilibrium
66
Productivity
The volume of output that is produced from a number of inputs and refers to how well factors of production combine to produce goods and services
67
The volume of output that is produced from a number of inputs and refers to how well factors of production combine to produce goods and services is known as?
Productivity
68
What is aggregate demand?
The total expenditure on Australian goods
69
The total expenditure on Australian goods is known as?
Aggregate demand
70
What us aggregate supply?
The total value of goods and services available for sale in a economy in a given time frame
71
The total value of goods and services available for sale in a economy in a given time frame is known as?
Aggregate supply
72
What is allocative efficiency?
A type of efficiency measured by how well resources are allocated and whether or not living standards are maximised as a result
73
A type of efficiency measured by how well resources are allocated and whether or not living standards are maximised as a result is known as?
Allocative efficiency
74
What is a Balanced budget?
When government revenue is the same as government expenditure
75
When government revenue is the same as government expenditure it is known as a?
Balanced budget
76
What is the Benefit cost ratio?
A ratio of benefits where a ratio greater than one indicates a projects benefits outweigh the costs
77
A ratio of benefits where a ratio greater than one indicates a projects benefits outweigh the costs is known as?
The Benefit cost ratio
78
What is budget constraint?
The amount of income consumers have at their disposal to spend on goods and services
79
The amount of income consumers have at their disposal to spend on goods and services is known as?
Budget constraint
80
What is budget surplus?
When government revenue exceeds government expenditure
81
When government revenue exceeds government expenditure it is known as a?
Budget surplus
82
What is business confidence?
The communities perception of their future levels of sales and profitability
83
The communities perception of their future levels of sales and profitability is known as?
Business confidence
84
What is capital?
Resources that have been made by combining labour and natural resources to create a more sophisticated input in the production process, "machinery"
85
Resources that have been made by combining labour and natural resources to create a more sophisticated input in the production process, "machinery" are known as?
Capital
86
What is a commodity?
Raw materials such as minerals and agricultural products
87
Raw materials such as minerals and agricultural products are known as?
Commodities
88
What are company taxes?
Taxes paid by corporations
89
Taxes paid by corporations are known as?
Company taxes
90
What is a competitive market?
Where all economic agents are price takers, and no individual buyer or seller has the power to influence market prices
91
Where all economic agents are price takers, and no individual buyer or seller has the power to influence market prices it is known as a?
Competitive market
92
What is consumer confidence?
An economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation
93
An economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation is known as?
Consumer confidence
94
What is consumer sentiment?
Consumer confidence
95
What is a consumer surplus?
The benefit consumers receive if they obtain a good or service for less than the maximum they are willing to pay?
Eg If someone was willing to buy a house for $600,000 and got it for $500,000 the consumer surplus is $100,000
96
The benefit consumers receive if they obtain a good or service for less than the maximum they are willing to pay it is known as a?
Consumer surplus
97
What is consumption expenditure?
An exchange of money for goods and services
98
An exchange of money for goods and services is known as?
Consumption expenditure
99
What is contraction?
A downturn in economic activity
100
A downturn in economic activity is known as a?
Contraction
101
What is a cost-benefit analysis?
A comparison of the expected costs and the expected benefits of a particular course of action or project
102
A comparison of the expected costs and the expected benefits of a particular course of action or project is known as a?
Cost benefit analysis
103
What is a default?
When borrowers fail to promptly pay interest on a loan or the principle on a loan when it falls due
104
When borrowers fail to promptly pay interest on a loan or the principle on a loan when it falls due it is known as a?
Default
105
What is deflation?
A decrease in the average price level over time
106
A decrease in the average price level over time is known as?
Deflation
107
What is depreciation?
When one currency is able to purchase less of another currency
108
When one currency is able to purchase less of another currency it is known as?
Depreciation
109
What is a direct tax?
A tax paid directly by economic agents, normally based on the income they earn
110
A tax paid directly by economic agents, normally based on the income they earn is known as a?
Direct tax
111
What is disequilibrium?
When the market is in a state of excess demand or supply
112
When the market is in a state of excess demand or supply it is known as?
Disequilibrium
113
What are dividends?
The payment of profit to shareholders
114
The payment of profit to shareholders are known as?
Dividends
115
What are economic agents?
Any entity such as a person, household, government or business that makes economic decisions
116
Any entity such as a person, household, government or business that makes economic decisions is known as a?
Economic agent
117
What is a efficient allocation of resources?
A situation where the economies scarce factors of production are allocated to the production of the goods and services that society values most
118
A situation where the economies scarce factors of production are allocated to the production of the goods and services that society values most is known as a?
Efficient allocation of resources
119
What is elasticity?
The responsiveness of demand and supply to a change in a variable such as price
120
The responsiveness of demand and supply to a change in a variable such as price is known as?
Elasticity
121
What is equilibrium price?
The price at which the quantity demanded is equal to the quantity supplied
122
The price at which the quantity demanded is equal to the quantity supplied is known as the?
Equilibrium price
123
What is equity?
The ownership of assets such as shares
124
The ownership of assets such as shares is known as?
Equity
125
What are ethics?
The moral principles that guide a persons behaviour and can therefore influence the consumption and production of goods
126
The moral principles that guide a persons behaviour and can therefore influence the consumption and production of goods are known as?
Ethics
127
What are externalities?
When the production or consumption of a good or service has an effect on a third party or bystander
128
When the production or consumption of a good or service has an effect on a third party or bystander, it is known as a?
Externality
129
What is factor income?
The total returns of production for the contribution to production
130
The total returns of production for the contribution to production is known as?
Factor income
131
What is financial capital?
Funding or money that is typically used to finance the acquisition of assets
132
Funding or money that is typically used to finance the acquisition of assets is known as?
Financial capital
133
What is fiscal drag?
The deflationary effect of a progressive taxation system on a country's economy. As wages rise, a higher proportion of income is paid in tax
134
The deflationary effect of a progressive taxation system on a country's economy. As wages rise, a higher proportion of income is paid in tax is known as?
Fiscal drag/Bracket creep
135
What are fixed costs?
Costs of production that do not vary with the quantity of goods or services produced and are present regardless
136
Costs of production that do not vary with the quantity of goods or services produced and are present regardless are known as?
Fixed costs
137
What is free trade?
Where nations can engage in international trade without facing protection or trade barriers from other countries
138
Where nations can engage in international trade without facing protection or trade barriers from other countries, it is know as?
Free trade
139
What are fringe benefits?
Non-monetary reward for contribution to the production process
Eg company car
140
Non-monetary reward for contribution to the production process are known as?
Fringe benefits
141
What is GDP
Gross domestic product
142
What is GDP per capita?
GDP per person
143
What are goods?
Physical items of value that are traded in markets
144
Physical items of value that are traded in markets are?
Goods
145
What is government business enterprise?
A business owned and operated by the government
146
A business owned and operated by the government is known as?
Government business enterprise
147
What is homo economicus?
The rational economic man that is trying to maximise utility by purchasing goods and services that reflect their preferences
148
The rational economic man that is trying to maximise utility by purchasing goods and services that reflect their preferences is known as?
Homo economicus
149
What is income?
Money that is typically received on a regular or recurring basis
150
Money that is typically received on a regular or recurring basis is known as?
Income
151
What is indirect tax?
A tax paid by economic agents via the purchase of goods and services
152
A tax paid by economic agents via the purchase of goods and services is known as?
Indirect tax
153
What are interest rates?
The cost of borrowing money or the rate of return from lending money
154
The cost of borrowing money or the rate of return from lending money are known as?
Interest rates
155
What is investment expenditure?
The purchase of new equipment
| Eg factory/inventory
156
The purchase of new equipment
| Eg factory/inventory is known as?
Investment expenditure
157
What is labour cost advantage?
When a countries labour cost is lower than another
158
When a countries labour cost is lower than another it is known as the?
Labour cost advantage
159
What is lasseiz faire?
The belief in a free market with minimal government intervention
160
The belief in a free market with minimal government intervention is known as?
Lasseiz faire
161
What is the law of diminishing marginal utility?
Where each additional unit of a good or service generates less utility and thus the price goes down
162
Where each additional unit of a good or service generates less utility and thus the price goes down is known as the?
Law of diminishing marginal utility
163
What is marginal utility?
The satisfaction that consumers gain from consuming an additional unit of a good or service
164
What is market failure?
A situation in which the allocation of goods and services is not efficient
165
A situation in which the allocation of goods and services is not efficient is known as?
Market failure
166
What is market power?
The ability of any particular business to manipulate prices or quantities
167
The ability of any particular business to manipulate prices or quantities is known as?
Market power
168
What is market structure?
The way markets are structured based on the type of buyers and sellers present
169
The way markets are structured based on the type of buyers and sellers present is known as?
Market structure
170
What is a monopolistic competition?
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.
171
What market is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes?
Monopolistic competition
172
What is multibranding?
Where companies market their products under separate and distinct brand names
173
Where companies market their products under separate and distinct brand names it is known as?
Multibranding
174
What are net benefits?
Benefits less costs - can be good or bad
175
What are net exports?
Exports minus imports
176
What are non material living standards
The aspects of a persons quality life that can not be measured by monetary factors
177
The aspects of a persons quality life that can not be measured by monetary factors are known as?
Non material living standards
178
What is nudge?
Subtly coaxing people into making good choices without having to resort to heavy financial incentives or sanctions
179
Subtly coaxing people into making good choices without having to resort to heavy financial incentives or sanctions is known as?
Nudge
180
What are preferences?
A consumers likes and dislikes
181
A consumers likes and dislikes are known as?
Preferences
182
What is a producer surplus
An economic measure of the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good
183
An economic measure of the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good is known as?
A producer surplus
184
What is product differentiation?
The marketing of generally similar products with minor variations that are used by consumers when making a choice
185
The marketing of generally similar products with minor variations that are used by consumers when making a choice is known as?
Product differentiation
186
What is the production possibility frontier?
A diagram that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed
187
A diagram that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed is known as the?
Production possibility frontier
188
What is productivity?
An economic measure of output per unit of input
189
An economic measure of output per unit of input is?
Productivity
190
What is profit?
When sales exceed expenses
191
When sales exceed expenses it is known as?
Profit
192
What is a progressive tax?
A tax that takes more from high income earners
193
A tax that takes more from high income earners is known as a?
Progressive tax
194
What is real income?
The income of an individual or group after taking into consideration the effects of inflation on purchasing power
195
The income of an individual or group after taking into consideration the effects of inflation on purchasing power is known as?
Real income
196
What is relative price?
The price of one good compared to another
197
The price of one good compared to another is known as?
Relative price
198
What is relative scarcity?
The circumstance that we do not have enough resources to satisfy all our wants and needs
199
The circumstance that we do not have enough resources to satisfy all our wants and needs is known as?
Relative scarcity
200
What is a subsidiary?
A company controlled by a holding company
201
A company controlled by a holding company is known as a
Subsidiary
202
What is a subsidy?
A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low
203
A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low is known as?
A subsidy
204
What is an tax incentive?
An aspect of a country's tax code designed to incentivize, or encourage a particular economic activity
205
What are Diminishing marginal returns?
The decrease in the marginal output of a production process as the amount of a single factor of production is increased, while the amounts of all other factors of production stay constant
206
The decrease in the marginal output of a production process as the amount of a single factor of production is increased, while the amounts of all other factors of production stay constant is known as?
Diminishing marginal returns
207
What is a sharing economy?
An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet
208
An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet is known as?
Sharing economy
209
What is market power?
The ability of a firm to profitably raise the market price of a good or service over marginal cost
210
The ability of a firm to profitably raise the market price of a good or service over marginal cost is known as?
Market power
211
What are some characteristics of conventional economics
For economic analysis, the assumptions made about people don’t have to be realistic, People are pretty much all the same people are different, with different tastes and preferences, markets are efficient even if they appear to be inefficient, efficiency is everywhere
212
What is expansion along the curves?
When price goes up along with supply
213
What is contraction along the curves?
When price goes down along with supply
