Unit 1: part 1 Flashcards
(21 cards)
” as price increases sales decrease “ … name two exceptions
snob goods
addictive products ie cigarettes
” as price decreases sales increase “ … name two exceptions
snob goods
low quality products ie sell by dates
What forms can scarcity take
time
resources (not having enough money)
goods (limited supply e.g. seasonal goods)
why does the basic economic problem exist
goods and resources are scarce
why would inefficiency occur on PPF graph
if there is a point below the PPF line on the graph showing that the maximum amount of something is not being produced in turns of another
what is meant if there is a point outside of the PPF line?
you are being more efficient then the maximum efficiency so one of the factors of the graph must have increased to higher the PPF line
what is a limitation with PPF
are you supplying for the demand?
for example are you balancing wants with how much of something you produce against the other?
4 reasons an axis (element) on the PPF would increase
- was under efficient and now efficient
- a decrease in one other so increase in axis
- PPF line moves out (increases)
- improving effiency of that element or axis
things to include when comparing
data
include both names
important / valid points
goods provided by the market
food
cars
clothes
goods provided by government
railway tracks
services
tapwater
both market and government provided goods
some charities
education
houses
public transport
what are the features of a market economy
resources allocated through supply and demand
government role is limited
government control property rights
what are the features of a command economy
production targets are set from the main features of the economy
ownership of key resources lies with state
what are the features of a mixed economy
some resources are allocated by the market e.g. the private sector such as cars and clothes.
some is allocated by the government ie railway tracks
why must the government have property rights in a market economy
(Russia 1917)
to stop copy right or streaking which leads to a lack of internal production as people are not credited and paid for their work.
what are the factors of production
enterprise
land
labour
capital
how do you improve economic welfare
anything to make a person happier
expt) stealing or anything that compromises the happiness of another
describe the production process
inputs > factor of production > output
the environment as a scarce resource
physical resources) soil, water, flowers, minerals
gases) H O
abstract resources) solar energy, wind energy, beauty
why might scarce resources be an issue even for the very rich
dead money) Ie money to spend but cannot because no resources to spend it on
limited incomes) few resources means for manufacturers that their output is limited
