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Question 1

PASIFIC

Answer 1

Population
Advertising
Substitutes
Income
Fashion/Trends
Interest rates
Complements

Question 2

PINTSWC

Answer 2

Productivity
Indirect tax
Number of firms in the market
Technology
Subsidies
Weather
Costs of production (wages, raw materials, etc)

Question 3

What is a market

Answer 3

A place where buyers and sellers come to exchange goods and services

Question 4

ARSI

Answer 4

allocates
Rations
Signals
Incentives

Question 5

SPLAT

Answer 5

Substitutes
Percentage of income
Luxury
Addictive
Time period

Question 6

EOIS

Answer 6

Elastic
Opposite
Inelastic
Same

Question 7

PSSST

Answer 7

Production lag
Stocks
Spare capacity
Substitutability
Time period

Question 8

YED

Answer 8

%ΔQd/%ΔY

Question 9

XED

Answer 9

%ΔQdA/%ΔPB

Question 10

PartySeasonNearChristmas

Answer 10

PositiveSub-NegativeComp

Question 11

Externality flow

Answer 11

1) What moves:
 Production -> costs
 Consumption -> benefit
2)Which way:
-ve -> left
\+ve -> right
3) moving curve is always social

Question 12

MERIT

Answer 12

• Underconsumed
• Missing information regarding the private benefit
• Have positive externalities

Question 13

DEMERIT

Answer 13

• Over Consumed
• Missing information regarding the private costs
• has negative externalities

Question 14

Public

Answer 14

non-excludable

non-rival

Question 15

Economic problem

Answer 15

How to allocate resources amongst alternative uses. What to produce, for whom and how..

Question 16

Scarcity

Answer 16

The situation where there are unlimited wants but finite resources.

Question 17

Opportunity cost

Answer 17

the value of the next best alternative forgone when making a choice

Question 18

4 FoP

Answer 18

Capital
Enterprise
land
labour

Question 19

Specialisation

Answer 19

The concentration of a worker, firm, region or country to produce a narrow ranges of goods/services

Question 20

Division of labour

Answer 20

The specialisation of labour where the production process is broken down into separate takes

Question 21

Advantages of division of labour

Answer 21

• More efficient workers
• More goods can be produced than before
• Leading to higher skills thus can demand higher wages

Question 22

Disadvantages of labour

Answer 22

• Lack of flexibility of workers hence boredom

- Over specialising thus workers may be unable to switch to other jobs

Question 23

Advantages of specialisation

Answer 23

• Increase in world output
• Increase in widening range of goods available
• Possible increased trade between developed and developing countries could increase the world equality
• Competition between firms means they must be efficient to survive

Question 24

Disadvantages of specialisation

Answer 24

• Adverse weather effects
• Reduced flexibility
• Trends/fashion
• Relies on finite resources
• may entail purchasing of tech and capital to replace humans as workers thus unemployment

Question 25

Define PPC

Answer 25

Shows the maximum potential output of two goods that can be produced in the current time period if all goods are efficiently employed

Question 26

Consumer surplus

Answer 26

The difference between what consumers are willing to pay and the price they actually pay (they're benefit)

Question 27

Producer surplus

Answer 27

The difference between what consumers are willing to sell for and the price they actually sell for (they're benefit

Question 28

Allocative efficiency

Answer 28

Where customer satisfaction is maximised (where P=MC) or =S=D

Question 29

Productive efficiency

Answer 29

Where production takes place using the least amount of scare resource for maximum output (bottom of AC curve

Question 30

Externalities

Answer 30

Costs to 3rd party not involved in a transaction or consumption of a good

Question 31

Negative externalities

Answer 31

Where the social costs of an activity are greater than the private costs

Question 32

Positive externalities

Answer 32

Where the social benefits are greater than the private benefits

Question 33

market failure

Answer 33

where the free market mechanism fails to achieve economic effiency

Question 34

FORs of tradable permits

Answer 34

- Market based s