Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

econs definitions > allocation of resources > Flashcards

allocation of resources Flashcards

1
Q

microeconomics

A

the study of the behaviour and decisions of households and firms, and the performance of individual markets

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

macroeconomics

A

the study of the whole economy

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

market

A

an arrangement which brings buyers into contact with sellers

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

planned economic system

A

an economic system where the government makes the crucial decisions, land and capital are state-owned and resources are allocated by directives

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

mixed economic system

A

an economy in which both the private and public sectors play an important role

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

market economic system

A

an economic system where consumers determine what is produced, resources are allocated by the price mechanism and land and capital are privately owned

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

3 key resource allocation questions

A

what to produce, how to produce it, and who is to receive the product

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

price mechanism

A

the way that resources are allocated by the interaction of demand and supply

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

demand

A

the willingness and ability of a consumer to buy a product at any given price

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

substitute

A

a product that can be used in place of another

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

complement

A

a product that is used together with another product

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

supply

A

the willingness and ability of a producer to sell a product at any given price

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

unit cost

A

the average cost of production, found by dividing total cost by output

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

direct taxes

A

taxes on income and wealth of individuals and firms

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

indirect taxes

A

taxes on goods and services

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

tax

A

a payment to the government

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

subsidy

A

a payment by the government to encourage the production or consumption of a product

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

excess demand / shortage

A

the amount by which demand is greater than supply

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

excess supply / surplus

A

the amount by which supply is greater than demand

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

price elasticity of demand

A

a measure of 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
21
Q

elastic demand

A

when the quantity demanded changes more than proportionately to a change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

inelastic demand

A

when the quantity demanded changes less than proportionately to a change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

perfectly elastic demand

A

when a change in price causes a complete change in quantity demanded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

perfectly inelastic demand

A

when a change in price has no effect on quantity demanded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

unit elasticity of demand

A

when a change in price causes an equal change in quantity demanded

26
Q

price elasticity of supply

A

a measure of the responsiveness of quantity supplied to a change in price

27
Q

elastic supply

A

when quantity supplied changes more than proportionately to a change in price

28
Q

inelastic supply

A

when quantity supplied changes less than proportionately to change in price

29
Q

perfectly elastic supply

A

when change in price causes complete change in quantity supplied

30
Q

perfectly inelastic supply

A

when change in price has no effect on quantity supplied

31
Q

unit elasticity of supply

A

when change in price causes equal change in quantity supplied

32
Q

PES/PED equation

A
33
Q

determinants of demand (acronym+)

A

producing paper is so incredibly painful
(price, preferences, income, substitutes/complements, interest rates, population)

34
Q

determinants of supply

A

costs of production, technology, tax/subsidies, number of firms, trends

35
Q

determinants of PED (acronym+)

A

SPLAT
(substitutes, proportion of income, luxury/neccessity, addiction, time)

36
Q

determinants of PES (acronym+)

A

FAST
(factor mobility, availability, storage, time to produce)

37
Q

public sector

A

part of economy controlled by gov

38
Q

privitisation

A

sale of public assets to private sector

39
Q

price mechanism

A

system by which market forces of demand and supply determine prices

40
Q

market failure

A

a situation where too much/little of g/s are produced and consumed than socially desirable level. misallocation of resources

41
Q

free rider

A

someone who consumes g/s wo paying

42
Q

third parties

A

those not directly involved in producing or consuming a product

43
Q

private costs

A

costs bourne by individual economic units

44
Q

external costs

A

negative spill-over costs to third party, costs imposed on those who are not directly involved in production/consumption of g/s

45
Q

social costs

A

full cost of an activity borne by society as a result of economic actions. calculated by adding private costs to external costs

46
Q

private benefits

A

advantages enjoyed by individual economic units producing/consuming product

47
Q

external benefits

A

advantages enjoyed by those not involved in consumption/production of product

48
Q

social benefits

A

full advantages enjoyed by society as result of actions by producers/consumers

49
Q

causes of market failure

A

underconsumption of merit goods, overconsumption of demerit goods, public goods, abuse of monopoly power, factor immobility

50
Q

merit goods

A

products that are socially beneficial (benefit third party and consumer/producer)

51
Q

demerit goods

A

products that are detrimental to society (detrimental to third parties and to consumer/producer

52
Q

public good

A

a product which is non-rival and non-excludable

53
Q

private good

A

a product which is rival and excludable

54
Q

monopoly

A

a single seller of g/s in a market

55
Q

nationalisation

A

moving ownership and control of an industry from private sector to gov

56
Q

what are the causes of market failure

A

underconsumption of merit goods, overconsumption of demerit goods, public goods, abuse of monopoly power, factor immobility

57
Q

why does the underconsumption of merit goods occur

A

low level of income among consumers, imperfect information

58
Q

why does the overconsumption of merit goods occur

A

lack of knowledge about harmful effects

59
Q

why are public goods market failure

A

free rider problem. non rival, non excludable, therefore not provided by free market (no profit incentive)

60
Q

why is abuse of monopoly power market failure

A

dominates market, restrict g/s to raise price

61
Q

why is factor immobility market failure

A

prevents resources from being allocated efficiently

62
Q
A

econs definitions (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions