Opportunity costs thresh hold one part 2 Flashcards
Microeconomics is concerned with the_________ of ___________ resources
- Distribution
- Scarce
Demands in society can be answered on different levels based on what two objectives?
Hint: something that’s quick and produces a high-level outcome?
Efficiency @ equity
If an economy changes something in a specific way that would meet with societies demands, think of what this is called?
Efficiency
Think of three factors that allow an economy to reach full efficiency?
- Efficient production
- Efficient Consumption
- Efficiency in specialization and exchange
Describe the meaning of the three factors?
Efficient Production-Producing goods at minimal cost
Efficiency in Consumption-Consumers allocates their expenditure to receive the fullest benefit of their income.
Efficiency in Specialisation and exchange?
Firms specialize in producing goods that consumers want. The consumer specializes in working to buy the goods.
Give an example of efficient Production ( name a company)
Nike, spent very little on producing their goods so the minimal cost is low.
give an example of Efficient Consumption
A woman spending their hard-earned money on a variety of things such as
football practice
Dancing sessions
swimming sessions
movies
Shopping etc.
think of an example of specialization and exchange
E.g. a company specializing in makeup, that consumers want. The consumers work so they can buy the makeup, hence the benefit of buying the make up is greater than it’s opportunity cost.
Think of examples of allocative efficiency
Efficient consumptions
Efficiency in specialisation and exchange
Think of how to increase allocative efficiency
The marginal benefit exceeds the marginal cost of that particular activity
What is the meaning of economic efficiency
when production of goods is at a minimal cost and society gain the greatest benefit relative to their resources
