mr Slattery theme 1

Question 1

ceteris paribus

Answer 1

all other things being equal

Question 2

normative statement

Answer 2

value based and involve opinions

Question 3

positive statement

Answer 3

supported by facts /evidence

Question 4

ppf

Answer 4

maximum possible output combinations of 2 goods/services an economy can achieve when all resources are being fully utilised

Question 5

factors of production

Answer 5

capital(tractors)
enterprise(uni)
land(diamonds)
labour(cleaning firms)

Question 6

difference between capital and consumer good

Answer 6

capital-end product
consumer-machine making the good

Question 7

division of labour

Answer 7

specialisintion of labour into separate tasks insuring higher productivity per worker

Question 8

productivity

Answer 8

controlling your inputs and maximising your outputs

Question 9

absolute advantage

Answer 9

being able to produce more of something than another country

Question 10

comparative advantage

Answer 10

being able to produce something at a much lower opportunity cost than another country

Question 11

marginal utility

Answer 11

additional satisfaction a consumer gains from consuming one more unit of a good/service

Question 12

producer surplus

Answer 12

difference between the amount the producer is willing to supply and the actual amount of money they receive

Question 13

dismissing marginal utility

Answer 13

the more you consume utility(satisfaction) goes down

Question 14

Adam smith

Answer 14

said economic development was best fostered in an environment of free competition that operated in accordance with universal natural laws
the wealth of nations
self interest
circular flow of income
risk and reward
trade leaves us better off

Question 15

flat tax

Answer 15

imposed on firms but can. be passed through higher prices

Question 16

ad valorem tax

Answer 16

percentage tax

Question 17

free market

Answer 17

buyers and sellers decide

Question 18

command/centrilised economy

Answer 18

government decide on production and distribute it

Question 19

mixed economies

Answer 19

some government intervention

Question 20

karl marx

Answer 20

capitalists control capital
motivated by profit
pay poor wages affects spending
long term capitalist fails
better idea is sharing the wealth

Question 21

demerit goods

Answer 21

gives you no benefits

Question 22

hayek

Answer 22

believes government makes the wrong decisions,only place for government is passing essential laws

Question 23

function of money

Answer 23

medium of exchange
measure of value
store of value
method of settling debt

Question 24

externalities

Answer 24

when a third party is affected by a market transaction

Question 25

Mpc mpb msc msb

Answer 25

marginal private cost marginal private benefit marginal social cost marginal social benefits

Question 26

subsidies

Answer 26

refer to direct payments that government provides businesses to offset some of their operating costs lower prices and increase consumption

Question 27

maximum pricing

Answer 27

when a price is set which the market will not be allowed to go above

Question 28

benefits of capping rent

Answer 28

decrease homelessness/poverty people can spend more money attracting essential workers

Question 29

problems of rent capping

Answer 29

rich people misuse overcrowding landlords not making enough profit