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UNI economics > lecture 1 - Capitalism and the market economy > Flashcards

lecture 1 - Capitalism and the market economy Flashcards

1
Q

what is economics>

A

the study of how people interact with each other, and natural environment, in producing livelihoods

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2
Q

what is capitalism?

A

an economic system in which is defined by markets, firms and private property

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3
Q

what has the rise in living standards been accompanied by?

A

change sin population and the way people live

change sin equality between countries

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4
Q

what is the hockey stick model?

A

a graph showing the rise in GDP over 1000 years between different countries

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5
Q

what are the countries in the hockey stick model?

A

china, india, britain, italy and japan

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6
Q

1000 years how can the hockey stick be describes?

A

economically flat

period of stagnation

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7
Q

when did britains GDP start to rise?

A

around the late 1700s early 1800s

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8
Q

when did japan/italy start to grow?

A

not till 1900s

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9
Q

how is the growth rate of GDP worked out?

A

change in GDP / original GDP

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10
Q

how can you work out the change in GDP

A

work out difference
divide by original number
times by 100

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11
Q

in some countries when was substantial improvements in living standards seen?

A

not until they gained independence from colonial rule of inference from european nations
(india 1947)

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12
Q

who was the founder of the field of understanding hockey stick growth?

A

adam smith who wrote the wealth of nations

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13
Q

what are two things that can be gathered from the hockey stick?

A
  • for a very long time living standards did not grow in any way
  • when sustained growth it happened at different times at different places
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14
Q

what is GDP per capita?

A

an estimate of living standards

total income in a country divided by population

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15
Q

what is GDP as a measure?

A

totally output of an economy

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16
Q

what is disposable income?

A

a meander of their living standards but ne that omits important aspects of wellbeing
any salaries/rent/proft etc minus any transfer to others and governments

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17
Q

what is a person living standards?

A

how well off a person is

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18
Q

why is disposable income an insufficient way of measuring wellbeing/living standards?

A

leavers out

  • social and physical enviro (friends and clean air)
  • goods endservices we don’t buy (education dn healthcare)
  • goods/services provided in the household (meals or childcare)
19
Q

why is average disposable income not a correct way of measuring average wellbeing?

A

there may be very big disparities between groups within a country
such as richest and the poorest
doesn’t reflect the real income of some people

20
Q

why might GDP be a beer way of measuring living standards than disposable income?

A

it includes goods and services provided by the government

but these can be hard to value

21
Q

what is a technology?

A

a process that uses inputs to produce an output

22
Q

what is an explanation that explains hockey stick growth?

A

technological progress

the oermannat technological revolution

23
Q

why did the permeant technological revolution occur?

A

as more technologies were created the time in which it took in production fell by each generation

24
Q

by reducing the amount of time it takes to produce thing what has happened?

A

allowed increase in living standards

25
Q

what is meant by a connected world?

A

everyone in contact with eahcother as a result of the technological revolution

26
Q

what can be used to compare to evidence of the permeant tech rev?

A

the speed in which information travels

27
Q

what is another explanation of the hockey stick growth?

A

the growth in poepelualtion

28
Q

what does increased productivity of labour in agriculture mean ?

A

fewer farmers are needed in order to produce the same output

29
Q

as more people left farming what happened?

A

they pursued other careers meaning the growth in cities

30
Q

what are some of the consequence sthat have arisen from the hockey stick growth?

A
  • global impacts like climate change
  • local impacts such as pollution, deforestation and congestion

increased production has increased the amount of fossil fuel burins and other materials that are needed in technologies

31
Q

what is the economy part of?

A

society which is part of the biosphere (collection of all forms of life)

32
Q

what is an economic system?

A

way of organising the production and distribution of goods and services in an entire economy

33
Q

what is an important form of private property, excluding an insitution?

A

capital goods e.g materials, patent and equipment

34
Q

what is a market?

A

a way of connecting people who mutually benefit by the exchange of goods and services in which are reciprocated

voluntary exchanges of buying and selling

35
Q

what are essential parts to how a firm works?

A

firm and market in that inputs and outputs ar epirvate property

firms use market to sell outputs

36
Q

why did adopting capitalism transform many economies?

A
  • private incentives for cost reducing innovation
  • firms led by those with proven ability to produce goods at a low cost
  • public policy supporting these condition
37
Q

what are the two sets of conditions that make a capitalist economic system dynamic?

A

economic conditions and political conditions

38
Q

what eceomic conditions mean that capitalism is not dynamic?

A
  • private property is insecure
  • monopolised markets / no competition
  • leadership in forms comes from inheritance (no merits)

lack innovation / bankruptcy of firms /

39
Q

why are political condition s important to the dynamism of capitalism?

A

it can set policies regarding whether private property is secure etc

40
Q

why might there be divergence among latecomers of capitalism?

A

for all the reasons for the economic conditions needed

41
Q

how can you measure inequality between countries?

A

using the mini coefficient

42
Q

what is thegini coefficient?

A

indicate show much disparity there is in income and other measure across income

0= no inequality
higher the higher to 1 the higher th e inequality

43
Q

what do some countries with high income GDP have?

A

high inequality

as a lot of the rich people won most of the money

44
Q

what is economics about?

A
  • how we acquire things/food/clothing/shelter
  • how we interact with each other
  • intercat with natural environment
  • how these things change over time

UNI economics (9 decks)

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