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H2 Economics > Important Things to Memorize > Flashcards

Important Things to Memorize Flashcards

1
Q

What are the non-price determinants of demand and supply?

A

Demand (PEYTDO)

Prices of related goods

Expectations of future income or price of good

Changes in consumer income (Y)

Taste and preference

Demographics

Others

Supply (CESSPO)

Cost of production

Expectations of future price of good

Number of Sellers

Supply shocks

Prices of related goods

Others

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2
Q

What are the factors affecting PED?

A

PANTAD

Proportion of Income

Availability of Substitutes

Degree of Necessity

Time period

Addiction

Definition

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3
Q

What are the factors affecting PES?

A

LALAT

Level and Durability of Stocks

Availability of Spare Capacity

Length and complexity of the production process

Availability and mobility of factors of production

Time Period

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4
Q

What are the factors affecting YED?

A

LD

Level of Income

Degree of necessity for the good

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5
Q

What is the factor affecting XED?

A

D

Degree of closeness of substitutes or complements

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6
Q

What are the different tools the government use to influence the market?

A

ISPPQ

Indirect Subsidies

Price Ceiling

Price Floor

Quota

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7
Q

What are the steps to explain market failure due to externalities?

A

EGMESOOCES DWL

Explain the externality

Explain implications on a graph

Explain the market equilibrium

Explain the socially optimal output (or the allocatively efficient output)

Compare Qe and Qs and point out the over/under consumption/production

Explain the deadweight loss (DWL)

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8
Q

What are the strategies to solve market failure due to negative externalities?

A

TQO TPRD

Taxes

Legislation - Quotas

Legislation - Others

Tradable Permits

Research & Development

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9
Q

What are the strategies to solve market failure due to positive externalities?

A

SCCJP

Subsidies

Legislation - Compulsory Consumption

Joint Provision

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10
Q

What are the strategies to solve market failure due to misestimating true costs or benefits?

A

ECLPCITS

Education and Campaigns

Legislation to make firms Provide Correct Information

Taxes

Subsidies

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11
Q

What are the two types of market failure due to asymmetric information?

A

Adverse selection & Moral hazard

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12
Q

What are the strategies to solve market failure due to adverse selection?

A

LPCPI LL RP

Legislation to force Producers to Consumers to Provide Information

“Lemon” Laws

Compulsory Risk-Pooling

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13
Q

What are the strategies to solve market failure due to moral hazard?

A

DCo-P

Deductibles

Co-Payments

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14
Q

What are the strategies to solve market failure due to merit goods?

A

SLCC JPEC LPC

Subsidies

Legislation - Compulsory Consumption

Joint Provision

Education and Campaigns

Legislation to make firms Provide Correct Information

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15
Q

What are the strategies to correct market failure due to demerit goods?

A

TLQLO TPRC LPCI

Taxes

Legislation - Quotas (complete ban as a special case

Legislation - Others

Tradable Permits

Research and Campaigns

Legislation to make firms Provide Correct Information

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16
Q

What are the strategies to correct market failure due to public goods?

A

DP

Direct Provision

17
Q

What are the two different types of factor immobility?

A

OIGI

Occupational Immobility and Geographical Immobility

18
Q

What are the strategies to solve market failure due to occupational immobility?

A

ET

Education and Training

19
Q

What are the strategies to solve market failure due to geographical immobility?

A

IC HMR GRG

Improving the Connectivity within the country

Housing Market Reforms

Giving Relocation Grants

20
Q

What are the strategies to solve market failure due to inequity?

A

SPC PTS MW WSLIE

Subsidies

Price Ceilings

A Progressive Tax System

Minimum Wages

Wage Subsidy for Low-Income Earners

21
Q

What are the different types of market failure?

A

Externalities

Imperfect Information

Merit and Demerit Goods

Public Goods

Factor Immobility

Inequity

22
Q

What are the factors affecting autonomous consumption?

A

EFP IRAL HWA

Expectations of Future Income (Y) and/or Prices

Interest Rates and Availability of Loan

Household Wealth

Attitude Towards Thrift

23
Q

What are the factors affecting investment?

A

IR CT BC PSI LT

Interest Rate

Corporate Taxes

Business Confidence

Political Stability and Infrastructure

Level of Technology

24
Q

What are the factors affecting government intervention?

A

GP

Government Policies

25
Q

What are the factors affecting net exports?

A

FIL DIL RPL ER

Foreign Income Level

Domestic Income Level

Relative Price Levels

Exchange Rates

26
Q

What are the 4 steps to explain the multiplier process?

A

HIS HIC HIE C

How It Starts

How It Continues

How It Ends

Conclusion

27
Q

What is the factor affecting SRAS?

A

COP, which is then affected by:

CW CPRM CER

Changes in Wages

Change in the Price of Raw Materials

Change in Exchange Rate

28
Q
A

H2 Economics (2 decks)

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