KA 2 Flashcards
(84 cards)
1
Q
What problems are there, if people take as much as they can from a good?
A
- not enough of the good
- some take more than they need
2
Q
All of us have… which can be satisfied by…
A
Wants, goods
3
Q
Capital goods:
A
Phone
Pen
Oil
Luxury goods
4
Q
Natural goods:
A
Air
Soil
Water
5
Q
What problem is there when it comes to our “wants” ?
A
Our wants are unlimited
6
Q
Most goods are…
A
Scarce
7
Q
The fact that most goods are scarce and our wants are unlimited causes conflict. How can we manage this conflict?
A
By making the right economic decisions
8
Q
What are needs?
A
Needs are things that are necessary for survival
9
Q
What are wants?
A
Wants are desires, that can be satisfied by consuming a good or service
10
Q
What are demands?
A
A demand is the willingness to buy a good or service and the ability to pay for it —> “spending power”
11
Q
What is one fact about maslows hierarchy of needs?
A
You cannot have the upper parts without the lower parts being covered. —> once the lower part is fulfilled you move up
12
Q
What are the 5 parts of maslows hierarchy?
A
- Biological/ physiological needs
- Safety needs
- Belonging and love needs
- Esteem needs
- Self- actualisation
13
Q
What is at the first place of the pyramid?
A
Biological and physiological needs
14
Q
What is at the second place of the pyramid?
A
Safety needs
15
Q
What is at the third place of the pyramid?
A
Belonging and love needs
16
Q
What is at the fourth place of the pyramid?
A
Esteem needs
17
Q
What is at the fifth place of the pyramid?
A
Self actualisation
18
Q
A
19
Q
What are examples for biological/ physiological needs?
A
Air
Food
Drink
Shelter
Warmth
Sleep
20
Q
What are examples for safety needs?
A
Protection
Security
Law
Health
21
Q
What are examples of belonging and love needs?
A
Affection
Family
Relationships
Friends
22
Q
What are examples for esteem needs?
A
Achievement
Status
Reputation
23
Q
What are examples for self-actualisation?
A
Peak experiences
Personal growth
Self-fulfilment
24
Q
Natural goods (free goods)
A
- unlimited
- no costs
- no price
—> no subject to trade
25
Three characteristics of capital goods:
- limited
- production causes costs
- have price
—> are subject of economic decisions
26
Relative scarcity:
—> with reference to our unlimited wants
27
Absolute scarcity:
—> limited natural resources, fossil fuels (oil lasts for about 35 years)
28
What’s re some problems of natural goods (for example air and water) ?
- careless use leads to pollution
- natural goods can turn into scarce goods
29
Excludability
The property of a good whereby a person can be prevented from using it
30
Rivalry
The property of a good whereby one persons use reduces the other peoples use
31
Public goods
Goods that are non-excludable and non-rival
32
Common resources
Goods that are rival but not excludable
33
Private goods
Goods that are excludable and rival
34
All of us have… which need to be…
Needs
Satisfied
35
What are things called that have a utility for us?
Goods
36
When do we have the principle of excludability?
When people can be prevented from using the good and the good is excludable
37
When do we have the principle of rivalry?
When one persons use of it, reduces another persons enjoyment of it
38
What are consumer goods and services?
Goods that we consume, that satisfy a need or want
39
What are producer goods?
Goods and services, used by a company to produce more of its own goods.
40
Examples of a service
Haircut
Car wash
41
What is the difference between durable and non-durable?
Durable things can be used multiple times, while non-durable things can only be used once
42
Examples for producer goods: (6)
Recipe book
Lorry
Car
Spade
Machinery
Computer
43
Examples for consumer goods: (6)
Cd player
Jeans
Personal computer
Trainers
Car
Sweets
44
Examples for private goods: (3)
Mobile phone
Laptop
Car
45
Examples for common goods: (3)
Highway/ Motorway
Clean air
Minerals
46
Examples for public goods: (3)
Environment
Street lighting
Infrastructure
47
Examples for Club goods: (3)
Cable tv
Private gyms
Movie theatres
48
What is a club good?
A type of good that is excludable and non-rivalrous.
49
Why are for example private gyms a club good?
Because using it doesn’t prevent others from enjoying it and doesn’t reduce the amount that is available to others, because it is possible to stop people from using the good.
50
What does it mean if a good is rivalrous?
Is the use of the good reduces the experience or the ability of another party to consume it
51
What are the economic factors of production?
Labour
Land
Capital
Education
Information
52
What happens in the production process?
The factors of production are combined
53
What are original factors of production?
Nature, labour
54
What are derived factors of production?
Capital
55
What do we need the factors of production for?
To create goods and services
56
What is a free-rider?
Someone who avoids paying for a good or service but who benefits from that good or service anyway
57
What is the problem when it comes to free-riders?
If many act as free-riders, the public good might never be provided and often markets have a difficult time deciding wether to produce a public good
58
How does the government decide, wether to provide a public good?
the benefits and costs of a project to society are calculated
59
What is a public good
Public goods are not excludable and not rivalrous. People can not be prevented from using it and neither does a persons use of it, reduce another person’s ability to use it
60
What is division of labour?
The separation of a work process into a number of tasks, where each task is performed by a separate person or groups of people
61
Advantages of division of labour:
- More productivity —> more outcome
- Allows workers to specialise on something
62
Disadvantages of division of labour:
- not everyone wants to always do the same thing
63
What is the production possibility curve?
A graph that shows different combinations of output that can be produced given current resources and technology
64
What are the different types of curves?
Convex curve
Isoquant curve
65
Which calculation is important for companies so they can be most efficient?
The minimum cost combination is important to calculate, so that companies know how many workers combined with how many machines would cost the least
66
What happens with production factors that have become more expensive and why?
They are replaced, which makes production more cost-effective
67
What is the homo oeconomicus?
It’s an economic model that acts purely economically and only makes the right decisions
68
What are characteristics of the homo oeconomicus? (5)
- flawless decision making
- never acts on impulse
- has perfect knowledge of everything
- only self interested
- always choses the option with the highest personal advantage
69
Why can the homo oeconomicus never be a human?
- we don’t have perfect knowledge
- we all have emotions
- we don’t always act rationally
- we are flawed
- we make mistakes
70
What are the three principles of distribution?
Principle of…
- performance
- need
- equality
71
What is the principle of performance?
Income is linked to individual performance
72
What is the principle of need?
Income is decided, based on how much is technically needed
73
What is the principle of equality?
Income is not based on anything. Everyone gets the exact same amount, no matter if someone worked harder or lesser
74
Problems with the principle of performance
Hard to measure
Recklessness gets promoted
75
Problems with the principle of need:
Hard to measure
Performance incentive is missing
Private
76
Problems with the principle of equality:
Skills and performance is not considered
Missing motivation
Free rider problem
77
What is the distribution of goods?
Process of delivering products/ services from producers to consumers in an economy
78
What is redistribution of goods and why is it important?
It’s the act of sharing something out differently and fairer than before.
Is secures economic justice and a redistribution of wealth.
79
80
How do you calculate the alternative costs?
Quantity of the consumer goods
Divided by
Quantity of capital goods
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