EXAM economic agents

Question 1

public sector

Answer 1

the part of the economy owned or controlled or operated by the government

Question 2

private sector

Answer 2

businesses owned and controlled by individuals, not governments. almost all are run in order to make profit (except for things like charities)

Question 3

consumer behaviour and 4 types

Answer 3

the study of why, how, where and when
consumers choose to purchase or not purchase a product.

Self-interest and rationality

Maximisation of utility

Maximise marginal utility from
consumption

Informed decision-making

Question 4

self interest and rationality

Answer 4

assumes that consumers behave in a rational, logical, self-interested and calculated way
In other words, make purchase decisions based on what makes you most happy –
don’t worry about what makes other consumers most happy

Question 5

being rational as a consumer

Answer 5

means acting in accordance with the things you are looking for when purchasing a product

Question 6

maximisation of utility

Answer 6

consumers will choose products that maximise their total utility
Utility refers to the satisfaction you get from consuming a product

Question 7

maximise marginal utility from consumption

Answer 7

Marginal utility refers to the extra satisfaction/utility gained from consuming additional quantities of a product, generally speaking as you consume more you benefit less so consumers will choose a wide variety of products

Question 8

informed decision making

Answer 8

before purchasing a product, consumers try to collect and analyse factual information so that they can weigh up the potential advantages and disadvantages