PPF DIAGRAM SPECIALISATION ETC

Question 1

social science meaning

Answer 1

a group of academic disciplines that examine society and see how they interact and develop as a culture

Question 2

• why do people react in different ways?
• why’s it impossible to conduct experiments in eco?
• why do people react differently?

Answer 2

they are not homogenous
impossible to conduct experiments known as behavioral economics
people react differently due to selection and observational bias

Question 3

what is economic model

Answer 3

simplified representation of reality that is used to provide an insight into economic decisions and events

Question 4

what is ceterus paribus

Answer 4

we focus on changes in one variable whilst all other influences are kept constant

Question 5

what is positive statement
what is normative statement

mcqs can test you on the differences between

Answer 5

positive statement is a objective/no judgement. Can be tested with evidence (will, has, done)
normative statement is value judgment cannot be tested with evidence is a opinion (should, ought)

Question 6

governments use value judgements for

Answer 6

policy decisions

Question 7

why do policymakers use value judgements

Answer 7

wide range of decisions so not all can be tested so policy makers use value judgements to make policy decisions.

Question 8

what is the economic problem

Answer 8

scarce resources and unlimited needs and wants

Question 9

factors of production + explain

Answer 9

CELL
CAPTIAL- manufactured stock of stools, machines etc. used in the production of goods and services

ENTERPRISE-skills entrepreneurs have and the risk they are willing to take

LAND-not just physical land but sea, underground and air

LABOUR-set of skills and training the economy’s workforce has.

Question 10

non-renewable resources meaning

Answer 10

resources that will never be replaced once used

e.g. coal, copper, oil

Question 11

renewable resources meaning

Answer 11

resources that can be replaced once used

e.g. solar power, wind power

Question 12

scarcity meaning

Answer 12

resources are limited in supply so cannot fulfill unlimited human needs and wants

Question 13

what is opportunity cost

Answer 13

value of the next best alternative foregone

Question 14

what are goods that have no opportunity cost called

Answer 14

free goods e.g. the air we breathe (unless we pollute it significantly)

Question 15

what are goods that are scare with opportunity cost called

Answer 15

economic goods

Question 16

what is production possibility frontier PPF

Answer 16

economic model maximum combination of goods and services produced in a given time with resources being allocated efficiently.

Question 17

what are consumer goods

Answer 17

goods that are used by people to satisfy their needs and wants such as: houses, TV

Question 18

what are capital goods

Answer 18

goods that are used in the production of other goods e.g. machines, factories, infrastructure

Question 19

points on the ppf can be …
points within the ppf can be…
moving towards ppf …
any points outside the ppf…

Answer 19

fully employed or economically efficient
points within ppf are inefficient or unemployed
economy is increasing to fully employed

points outside unfeasible or unobtainable
unless economic growth where sacrificing living standards in the short run

Question 20

opportunity cost inside ppf ?

Answer 20

no

Question 21

opportunity cost ON the PPF

Answer 21

yes OC on ppf

it is not possible to increase the output of one good without increasing the output of the other good

Question 22

opportunity cost on straight line

straight line ppf can suggest

Answer 22

constant

straight line ppf can suggest individual worker

Question 23

what happens if the ppf shifts outwards

Answer 23

ppf shifts outwards there is an increase in the quality or quantity of the factors of production hence economic growth

Question 24

to move along the ppf…

Answer 24

reallocation of resources

e.g. because governments want to increase the welfare of their citizens.

Question 25

to shift the ppf

Answer 25

increase in quality or quantity of factors of production

Question 26

what is specialisation

Answer 26

individuals, firms and economies focus on producing goods and services in which they have an advantage in

Question 27

specialization results in 2 things

Answer 27

productivity increases

increased risk for economic agents as specializing rather than diversifying

Question 28

money must fulfill 4 functions

Answer 28

m/m/mv/v
money of deferred payment: money must link to different time periods when saved and borrowed.

medium of exchange: buy and sell goods to overcome the double coincidence of wants

measure of value: something £20 and something £10 we know the first is twice as valuable

store of value: people can defer spending and use it later on in same time periods

Question 29

what is division of labour

Answer 29

production process broken down into a sequence of stages where workers assigned too particular stages.

Question 30

higher output + productivity = ?

Answer 30

higher output + productivity means= lower cost per unit
lower cost per unit is what firms want as it
-saves wage costs
-aids living standards
-economic growth

Question 31

higher productivity means

Answer 31

• more jobs available workers can specialize in specific tasks they do best, specific task is more skilled
• less time wasted from moving one job to another
• time saved in training workers

Question 32

what does monotony of work mean

and possible consequences

Answer 32

when workers are assigned to specialize in a limited tasks and their work may become monotonous and boring

• lower quality of work, lower productivity
• higher cost per unit
• increased staff turnover more people leaving the business

Question 33

lower productivity means

Answer 33

• lower quality of work, lower productivity
• higher cost per unit
• increased staff turnover more people leaving the business

Question 34

chance of structural employment

greater independence

Answer 34

chance of structural employment means
breaking down into different parts means workers are more likely to be replaced by machines
AS A RESULT/ THEREFORE/ CONSEQUENTLY
workers are unemplyed in one sector of the economy
e.g. ship building

tasks reply on each other.if production process breaks down it would damage a firms reputation and products may be delayed

Question 35

what has trade done to firms and countries

Answer 35

may them more interdependent and reliant for each other for their success.

Question 36

overspecializing results in

Answer 36

increased risk as not diversifying 
e.g,bmw lower productivity
less sales
less profit
germany eco growth decrease
rise in unemployment

Question 37

what is free market
mixed economy
command economy

Answer 37

scarce resources allocated entirely by price mechanism (consumers and suppliers)
scarce resources allocated by price mechanism and government
scarce resources allocated entirely by the government

Question 38

adv and disadv of free markets

Answer 38

adv
firms compete for profits to become more economically efficient
-no or low corporation tax greater incentive to work fuels higher economic growth

dis
inequality no gov benefits or public servies
MARKET FAILURE- resources not allocated efficiently
e.g. goods under provided care+education

Question 39

adv and disadv of command economy

Answer 39

adv
guaranteed standard of living
solving market failure e.g. promoting equality, goods services for poor
tackling goods with negative externalities like alcohol and cigarettes

disadvantages
lack of choice and freedom government divide which goods to produce rather than consumers
-lower economic growth as there is no incentive/ no profit motive.

Question 40

mixed economy adv + disadv (small)

Answer 40

some closer to free markets and some closer to command economy
solves market failure and provides minimum standard of living
e.g. government providing public good