Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

MICRO ECONOMICS > Micro > Flashcards

Micro Flashcards

1
Q

Allocative efficiency

A

Consumer satisfaction is maximised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Productive efficiency

A

Firm operates at lowest average cost, choosing appropriate inputs and producing Max output from those inputs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Ad valorem tax

A

Tax levied on a commodity, set as a percentage of the selling price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Adverse selection

A

Situation when a person at risk is more likely to take out insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Asymmetric information

A

Participants in a market have better information about market conditions than others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Average total cost (ATC)

A

Total cost divided by output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Buffer stock

A

Buying excess supply in periods when supply is high and selling when supply is low
Scheme intended to stabilise the price of a commodity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Capitalism

A

Private ownership of resources , individuals are free to pursue their objectives with minimal gov interference

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Planned economy

A

Decisions on resource allocation are guided by the state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Ceteris parabus

A

Change in one variable whilst holding others constant (other things being equal)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Competitive static analysis

A

Effect on equilibrium of a change in the external conditions affecting a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Competitive demand

A

Demand for goods in competition with another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Competitive market

A

Market where individual firms cannot influence price of good selling because of competition of other firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Competitive supply

A

Firm can use its FOP to produce alternative products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Complements

A

2 goods consumed jointly , increase in P of one decreases D of other

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Composite demand

A

Demand for good with multiple uses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Composite supply

A

Product serves more than one market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Consumer surplus

A

Value consumers gain from consuming G/S above price paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Consumption externality

A

Externality that affects consumption side of market (affect upon 3rd party) can be +-

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Cost efficiency

A

Appropriate mix of FOP given relative prices of those factors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

XED

A

% change in QD of Good A
—————————————
% change in P of Good B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Demand

A

Quantity of a G/S consumers are willing and able to buy at any possible price and time period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Demerit good

A

Good brings less benefit to consumers than expected , over consumed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Derived demand

A

Demand for a FOP which derives not from the factor itself but from the goods it’s produces

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Division of labour

A

Production process is broken down into a sequence of stages , workers are assigned to particular stages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Economic efficiency

A

Productive + allocative efficiency reached

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Economic growth

A

Expansion in the productive potential of an economy ( Increased GDP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Economies of scale

A

Increase in the scale of production leads to production at a lower average cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Elasticity

A

Sensitivity of one variable to changes in another variable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Excess burden of a sales tax

A

Dead weight loss to society following the imposition of a sales tax

31
Q

Externality

A

Cost/benefit external to a market transaction, not reflected by market prices, borne by a third party

32
Q

FOP

A 
Resources used in production process
Land
Labour
Capital
Enterprise
33
Q

Firm

A

Organisation that brings together FOP to produce output

34
Q

Fixed costs

A

Costs which do not vary directly with output eg - Rent

35
Q

Free market economy

A

Resource allocation guided by the market forces - D&S- without gov intervention
(Adam smiths invisible hand)

36
Q

Free rider problem

A

Individual consumes and receives benefits from a G- haven’t paid for its provision

37
Q

Government failure

A

Misallocation of resources arising from gov intervention

38
Q

GDP

A

Measure of economic activity in a given period

39
Q

YED

A

Measure of the sensitivity of QD to a change in consumer incomes

40
Q

Indirect tax

A

Tax levied on expenditure on G/S

41
Q

Inferior good

A

Quantity demanded decreases in response to an increase in consumer incomes

42
Q

Joint demand

A

Demand for goods interdependent (demanded together)

43
Q

Joint supply

A

Firms produces more than one good together

44
Q

MC

A

Cost of producing an additional unit of output

45
Q

MSB

A

Additional benefit society gains from consuming an extra unit of a good

46
Q

MSC

A

Cost of society producing an extra unit of a good

47
Q

Market

A

Where buyers and sellers meet , allows transactions to take place

48
Q

Market failure

A

Free market mechanism does not lead to optimal allocation of resources
Divergence between MSB & MSC

49
Q

Merit good

A

Good that brings unanticipated benefits to society

Under-consumed

50
Q

Minimum wage

A

Min wage employers are permitted to offer workers

Protects low paid

51
Q

Mixed economy

A

Resources are allocated through price signals and direction of government

52
Q

Moral hazard

A

Person taking out insurance is prone to taking more risk

53
Q

Normal good

A

Quantity demanded increased in response to an increase in consumer incomes

54
Q

Normative statement

A

Value judgement

What is ought to be

55
Q

Positive statement

A

Factual

What is

56
Q

PED

A

% change in QD
————————
% change in P

57
Q

PES

A

Sensitivity of quantity supplied of a G/S to a change in price of that G/S

58
Q

Private cost

A

Cost incurred by a firm/consumer as part of production or other economic activities

59
Q

Private good

A

Good that if consumed by one , cannot be consumed by another

  • excludability
  • rivalrous
60
Q

Producer surplus

A

Difference between price revived and price prepared to supply G/S at

61
Q

Production externality

A

Externality that affects the production side of the market , may be +/-

62
Q

PPC

A

Max combinations of G/S that can be produced in a set period of time given available resources

63
Q

Prohibition

A

Attempt to prevent the consumption of a demerit good by declaring it illegal

64
Q

Public good

A

Non - exclusive
Non - rivalrous
Consumers not excluded from consuming good
Consumption by one does not affect the amount of the good available for others to consume

65
Q

Scarcity

A

Economic problem

Unlimited wants/needs in the face of limited scarce resources

66
Q

Specific tax

A

Fixed amount of tax imposed of purchases of a commodity

67
Q

Subsidy

A

Grant given by gov to producers to encourage the consumption of a G/S

68
Q

Substitutes

A

Consumers regard 2 goods as alternatives

69
Q

Sunk costs

A

Costs incurred by a firm that cannot be recovered if the firm ceases trading

70
Q

Superior good

A

As incomes rise, consumers spend more on the good

71
Q

Total cost TC

A

Sum of all costs incurred from producing at a given level of output

72
Q

Technical efficiency

A

Maintaining Max output from a given set of inputs

73
Q

Unemployment

A

Person actively seeking employment cannot find work

74
Q

Variable costs

A

Costs which vary directly with output

MICRO ECONOMICS (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions