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this is econs bitch > i hate econs > Flashcards

i hate econs Flashcards

me when me when me when *throws myself off a cliff*

1
Q

microeconomics

A

individual parts of the economy + demand and supply of particular goods and services

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2
Q

macroeconomics

A

economy as a whole + aggregate demand and aggregate supply

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3
Q

positive statement

A

statement of fact + can be proven through facts

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4
Q

normative statement

A

statement of opinion + cannot be proved/ disproved by facts

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5
Q

what is the problem of scarcity?

A

limited resources and unlimited wants

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6
Q

factors of production (FOP)

A

CELL - capital, entrepreneurship, land, labour

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7
Q

capital

A

manmade resources (physical capital NOT money)

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8
Q

entrepreneurship

A

overall responsibility of decision-making process

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9
Q

land

A

natural resources

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10
Q

labour

A

human capital

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11
Q

opportunity cost

A

(expected) benefits from the next best alternative (only one) forgone + includes explicit (money) and implicit costs (time, energy, etc)

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12
Q

what assumption is made regarding economic agents

A

they are rational - aim to max. own benefit and min. costs of choice

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13
Q

marginalist principle

A

decisions made at the margin

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14
Q

marginal benefit

A

additional benefit derived from one additional unit of the good

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15
Q

marginal cost

A

additional (opportunity) cost incurred for one additional unity of the good

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16
Q

consumer: aim

A

maximise satisfaction/ utility, subject to income constraints

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17
Q

consumer: benefits

A

marginal private benefit = marginal utility

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18
Q

Law of Diminishing Marginal Utility (LDMU)

A

as the quantity of a good consumed increases, the marginal utility falls

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19
Q

consumer: costs

A

marginal private cost: price paid

20
Q

consumer: decision making

A

consume if MU>MC
stop when MU=MC
consume less if MU<MC

21
Q

producer: aim

A

maximise profit

22
Q

producer: benefits

A

marginal private benefit = marginal revenue

23
Q

producer: costs

A

marginal cost

24
Q

Law of diminishing marginal returns

A

increase variable FOP with a given amt of fixed factor, there will be a point when each extra unit of variable FOP will produce less extra output than prev unit

25
Q

producer: decision making

A

prod more if MR>MC
stop when MR=MC
prod less when MR<MC

26
Q

government: aim

A

maximise social welfare and achieve both micro and macroeconomic objectives

27
Q

government: benefit

A

marginal social benefit

28
Q

government: cost

A

marginal social cost

29
Q

government: decision making

A

continue if MSB>MSC
stop if MSB=MSC
do less if MSB<MSC

30
Q

3 key econs qns

A

what and how much to produce
how to produce
for whom to produce

31
Q

free market economy

A

allocate resources through price mechanism based on forces of market demand and supply + limited role of gov

32
Q

planned or command economy

A

state allocates resources

33
Q

mixed economy

A

mixed lor

34
Q

what is production possibility curve (ppc)

A

it shows all maximum attainable combinations of two goods that a country can produce with all its resources fully and efficiently employed (within specified time period)

35
Q

scarcity in ppc

A

attainable vs unattainable points

36
Q

choice in ppc

A

only one combi can be chosen

37
Q

opportunity cost in ppc

A

increasing OC: downward sloping gradient or ppc concave to origin
constant OC: straight line ppc

38
Q

productive efficiency

A

all available resources are fully and efficiently employed

39
Q

productive efficiency in ppc

A

all points on ppc

40
Q

allocative efficiency

A

society produces and consumes a combination of goods and services that maximises its welfare

41
Q

allocative efficiency in ppc

A

only one point on ppc

42
Q

actual economic growth

A

increase in real national output

43
Q

actual growth in ppc

A

movement from point within ppc to closer/ on the ppc

44
Q

potential economic growth

A

increase in economy’s ability of produce goods and services (productive capacity)

affected by: change in quantity and quality of resources, change in tech (increase productivity of resources)

45
Q

potential growth in ppc

A

shift of entire ppc

this is econs bitch (3 decks)

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