Econ1

Question 0

Normal Good

Answer 0

A good for which demand increases as income increases

It therefore has +YED

Question 1

Social Cost

Answer 1

The private cost + external cost of any decision or action a consumer or firm makes.

Question 2

Economies Of Scale

Answer 2

Where average costs fall as the size of the firm increases

Question 3

Factor Of Production

Answer 3

An economic resource that is employed to produce goods or services

Question 4

Scarce Resources

Answer 4

Factors Of Production where demand for it exceeds supply.

Question 5

Equilibrium Price

Answer 5

The price at which demand meets supply.

Also known as the market clearing price

Question 6

Market Failure

Answer 6

When a market results in a misallocation of resources

Question 7

Composite Demand

Answer 7

Demand for a good that has multiple uses meaning that an increase in demand for one if its uses leads to a decrease in demand for another.
Eg OIL for petrol/plastics

Question 8

Public Good

Answer 8

A good where it is impossible to exclude anyone from consuming it. Non-diminishable meaning that the arrival of more demand will not reduce what others can consume.

Question 9

Derived Demand

Answer 9

Where the demand for one good originates from the demand of another.

Question 10

Joint Demand

Answer 10

Where the demand for one thing goes hand in hand for another
Eg Consoles and Controllers
Eg Cars and Tyres

Question 11

Market Mechanism

Answer 11

The process through which markets solve the problem allocating scarce resources between competing uses

Question 12

Price Mechanism

Answer 12

Describes the means by which spending decisions taken by consumers and supply decisions taken by producers interact to determine the allocation if scarce resources between competing uses

Question 13

Inflationary Pressure

Answer 13

Occurrences that are likely to lead to increased prices.

Question 14

Investment Good

Answer 14

A product that will increase in value over time.

Question 15

Government Failure

Answer 15

When government intervention to correct market failure doesn’t improve the allocation of resources / leads to the worsening if the situation

Question 16

Planned Supply

Answer 16

The amount producers plan to produce at a given price

Question 17

Actual Supppy

Answer 17

The actual amount that producers in fact produce

Question 18

PPB

Answer 18

Indicates max possible output that can be achieved given a fixed set of resources in a period of time

Question 19

Productive Effiency

Answer 19

When a firm operates at min average total cost, producing max possible output from the inputs.

Question 20

Division Of Labour

Answer 20

Where production process is broken down so workers are assigned particular tasks.

Question 21

Specialisation

Answer 21

Production of a limited range of goods by an individual FOP/firm/country along with others so a range of goods is produced.
INCREASES PRODUCTIVITY

Question 22

Effective Demand

Answer 22

Demand supported by the ability to pay for a good/service

Question 23

Contraction

Answer 23

A decrease in demand due to an increase in price

Question 24

Extension

Answer 24

An increase in demand due to a decrease in price

Question 25

Allocative Efficiency

Answer 25

Achieved in economy when it is not possible to make anyone better off without making someone worse off.
YOU CANT PRODUCE MORE OF ONE GOOD WITHOUT MAKING LESS OF ANOHER

Question 26

Policy Myopia

Answer 26

Short term quick fixes that provide short term relief but does nothing to address structural economic difficulties

Question 27

Inferior Good

Answer 27

A good for which as income increases demand for it decreases so -YED

Question 28

Positive Externality

Answer 28

Where MSB>MPB therefore benefits are received by a 3rd party

Question 38

Negative Externality

Answer 38

Costs imposed on a 3rd Party not involved with the consumption or production of the good.
No appropriate compensation is paid.

Question 39

Externality

Answer 39

Third party spillover effects that arise from production/consumption of goods and services.
No compensation is paid by either party.

Question 40

Subsidy

Answer 40

Payment by the government to producers, designed to encourage them to produce more of a good/service.

Question 41

Incidence Of Tax

Answer 41

The proportion of a tax that is passed onto the consumer

Question 42

Regulatory Capture

Answer 42

When the industries under control of a regulatory body appear to operate on the best interests of producers rather than consumers

Question 43

Normative Statement

Answer 43

Opinions that require value judgements to be made.

Question 44

Positive Statement

Answer 44

Statements that can be tested against real world data.

Question 45

Occupational Immobility

Answer 45

As patterns of demand and employment change many workers may find it difficult to easily secure new jobs since they may lack the necessary skills

Question 46

Geographical Immobility

Answer 46

Where workers find it difficult to move where employment opportunities might be because if family ties or housing costs

Question 47

Income

Answer 47

A flow of earnings to a FOP over a period of time in return for labour

Question 48

Wealth

Answer 48

A stock of owned assets like property or shares

Question 49

Value Judgements

Answer 49

Statements/opinions expressed that aren’t testable. They depend on the persons views and the values they hold