Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Econ K > Theme 1 > Flashcards

Theme 1 Flashcards

(52 cards)

Start Studying
1
Q

What is scarcity?

A

Limited resources to meet unlimited wants.

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

What is opportunity cost?

A

The next best alternative foregone when a decision is made.

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

What is a positive statement?

A

A factual claim that can be tested and proven true or false.

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

What is a normative statement?

A

A value judgement or opinion that cannot be tested.

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

What are the factors of production?

A

Inputs used in the production of goods/services – land, labour, capital, and enterprise.

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

What is a production possibility frontier (PPF)?

A

A curve showing the maximum potential output combinations of two goods/services an economy can achieve when all resources are fully and efficiently employed.

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

What is demand?

A

The quantity of a good or service consumers are willing and able to buy at a given price.

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

What is supply?

A

The quantity of a good or service producers are willing and able to sell at a given price.

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

What does ceteris paribus mean?

A

All other things being equal – used to isolate the effect of one variable.

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

What is market equilibrium?

A

The point where quantity demanded equals quantity supplied.

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

What is excess demand?

A

When quantity demanded exceeds quantity supplied at a given price.

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

What is excess supply?

A

When quantity supplied exceeds quantity demanded at a given price.

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

What is consumer surplus?

A

The difference between what a consumer is willing to pay and what they actually pay.

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

What is producer surplus?

A

The difference between what a producer is paid and the minimum they are willing to accept.

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

What is price elasticity of demand (PED)?

A

The responsiveness of quantity demanded to a change in price.

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

What is income elasticity of demand (YED)?

A

The responsiveness of demand to a change in income.

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

What is cross elasticity of demand (XED)?

A

measures how much the demand for one good changes when the price of another good changes.

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

What is price elasticity of supply (PES)?

A

The responsiveness of quantity supplied to a change in price.

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

What is market failure?

A

When the free market fails to allocate resources efficiently.

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

What is an externality?

A

A cost or benefit to a third party not involved in a transaction.

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

What is a negative externality?

Study These Flashcards
A

A harmful effect experienced by third parties.

22
Q

What is a positive externality?

Study These Flashcards
A

A beneficial effect experienced by third parties.

23
Q

What is private cost?

Study These Flashcards
A

Cost incurred by the individual or firm involved in a transaction.

24
Q

What is external cost?

Study These Flashcards
A

Cost incurred by third parties outside the transaction.

25
What is social cost?
The total cost to society = private cost + external cost.
26
What is private benefit?
Benefit received by the individual or firm involved in a transaction.
27
What is external benefit?
Benefit received by third parties.
28
What is social benefit?
Total benefit to society = private benefit + external benefit.
29
What are public goods?
Goods that are non-rivalrous and non-excludable (e.g. street lighting).
30
What is the free rider problem?
When people benefit from a good without paying for it.
31
What are quasi-public goods?
Goods that are partially non-rival and/or non-excludable.
32
What are information gaps?
When consumers or producers lack the information needed to make rational decisions.
33
What is an indirect tax?
A tax levied on goods and services, such as VAT or excise duty.
34
What is a subsidy?
A payment by the government to encourage production or consumption.
35
What is a maximum price (price ceiling)?
A legal upper limit on the price of a good, set below equilibrium to make it more affordable.
36
What is a minimum price (price floor)?
A legal lower limit on the price of a good, set above equilibrium to protect producers.
37
What are tradable pollution permits?
Licenses allowing firms to emit a certain level of pollution, which can be bought and sold.
38
What is regulation?
Laws or rules set by the government to control economic activity.
39
What is state provision?
Goods or services provided directly by the government (e.g. healthcare, education).
40
What is government failure?
When government intervention leads to a net welfare loss.
41
What is a Normal Good? Give an example.
A good where demand increases as income increases (YED > 0). Example: Branded clothing or restaurant meals.
42
What is an Inferior Good? Give an example.
A good where demand decreases as income increases (YED < 0). Example: Supermarket own-brand products, instant noodles.
43
What is a Luxury Good? Give an example.
A normal good with YED > 1; demand rises more than proportionally with income. Example: Designer handbags, sports cars.
44
What is a Necessity Good? Give an example.
A normal good with inelastic income elasticity (0 < YED < 1). Example: Bread, electricity, basic toiletries.
45
What are Substitute Goods? Give an example.
Goods that replace each other; positive XED. Example: Coke and Pepsi, Android phones and iPhones.
46
What are Complementary Goods? Give an example.
Goods used together; negative XED. Example: Printers and ink cartridges, toothbrush and toothpaste.
47
What is a Merit Good? Give an example.
A good that is under-consumed in the free market and has positive externalities. Example: Education, vaccinations, public libraries.
48
What is a Demerit Good? Give an example.
A good that is over-consumed in the free market and has negative externalities. Example: Cigarettes, alcohol, junk food.
49
What is a Public Good? Give an example.
A good that is non-rival and non-excludable. Example: Street lighting, national defence.
50
What is a Private Good? Give an example.
A good that is rival and excludable. Example: Sandwiches, smartphones.
51
What is a Quasi-Public Good? Give an example.
A good that has some characteristics of public goods. Example: Roads (can be excludable if tolled), public parks.
52
where can I find allocative efficiency on a graph
where P=MC or where AR=MC

Econ K (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions