red and yellow topics

Question 1

functions of money

Answer 1

• medium of exchange - no need for barter, intermediary
• unit of account - common measure for value
• store of value - can be used for people to store wealth or value over time
• standard of deferred payment - agreements for future payments like loans

Question 2

functions of the price mechanism

Answer 2

• rationing: scarce resources allocated to those wiling to pay the highest price
• incentive: gives producers a profit incentive to supply the market
• signalling: price changes tell producers what to do - higher demand so higher price tells consumers to produce more

Question 3

context of price mechanism in local, national and global

Answer 3

local - limited competition, possibly les information so a less efficient price mechanism

national - more information and more competition, as well as mobility of fectors - better more efficient price mech

global - quick and volatile price transmission - shows shocks quikcly

Question 4

public goods

Answer 4

non excludable, non rivalrous

Question 5

rivalrous/non rivalrous meaning

Answer 5

one person’s use does/doesn’t diminish the amount available for others

Question 5

excludable/non excludable meaning

Answer 5

one is/isn’t prevented from accessing the good without paying

Question 6

european emissions trading scheme TPPS

Answer 6

TPPs are permits allowing firms to pollute a set amount
European EMission trading scheme - intro in 2005, has 4 stages - now in stage 4, meeting targets to increase the decrease in number of TPPS from 2.2% a year to 4.2% a year, intro of 100 euro fines for every tonne over and launching 2 new investment funds

Question 7

Tesla TPPs

Answer 7

uses TPPs for profit - cars and manufctuign hardly emit any carbon, so sell their TPPs - in 2024 they made 30% of their profit just from this