1. Microeconomics

Question 1

Rationalisation

Answer 1

Decision making that leads to economic agents maximising their utility

Question 2

Allocative efficiency

Answer 2

P=MC
recourses are allocated efficiently to meet consumer needs

Question 3

productive efficiency

Answer 3

ac=mc
Where recourses are allocated optimally, so every consumer benefits and waste is minimised

Question 4

Trade off

Answer 4

When one thing is lost to gain something else

Question 5

Planned Economy

Answer 5

The government allocates all of the scarce resources in an economy to where they think there is a greater need

Question 6

Free Market economies

Answer 6

Leave the supply and demand allocate scarce resources, taken by private individuals and firms

Question 7

Incentives on economic agents for recourse allocation

Answer 7

Entrepreneur takes risks
Demand and price will mean more recourses to producing that good

Question 8

economic incentives

Answer 8

profit
high prices
high demand
innovate, improve quality and reduce costs

Question 9

short run

Answer 9

at least one factor of production if fixed

Question 10

long run

Answer 10

all factors of production are variable