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Microeconomics > behavioural > Flashcards

behavioural Flashcards

1
Q

What is production

A

Output

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2
Q

What is productivity?

A

Rate of output

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3
Q

What is the formula for productivity?

A

Total output/number of units of labour

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3
Q

What is productivity defined as?

A

The output per unit of input employed

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4
Q

What is division of labour?

A

Breaking the process down into a sequence of tasks, with workers assigned to particular tasks

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4
Q

What does increased productivity do to average costs

A

Lowers average costs

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5
Q

What are the advantages of division of labour?

A

Replace labour with machinery
Lower labour costs
average costs
greater producivity

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6
Q

What are the factors affecting labour productivity?

A

Technology
Training
Wages
Infrastructure
Motivation

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7
Q

What are the advantages of specialisation?

A

-become better
-better quality and higher quantity
-more efficient production - more output
-reduced training costs

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8
Q

What is marginal utility

A

The (addition to the total) additional welfare gained from consuming one extra unit of a good.

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8
Q

What are the disadvantages of specialisation?

A

Boredom
Countries become less self sufficient

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8
Q

What is specialisation?

A

A worker only performing one task or a narrow range of tasks. Also different firms specialising in producing gs and s

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8
Q

What are the functions of money

A

A measure of value
A store of value
A standard of deferred payment (payed at later dates)

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8
Q

What is money

A

A medium of exchange

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8
Q

How do we measure welfare

A

GDP/per capita
Consumer surplus
HDI

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9
Q

What is utility maximisation

A

rational individuals seek to allocate their resources (money or time) in a way that maximizes their total utility.

9
Q

What is behavioural economics?

A

A method of econ analysis that applies psychological insights into human behaviour to explain how individuals make choices and decisions

10
Q

What is bounded rationality

A

Making irrational choices because of limitation of info, cognative abilities, time whilst making decisions

11
Q

What is bounded self control?

A

Limited self control in which individuals lack the self control to act in what they see as their self interest.

11
Q

What is satisficing?

A

Achieving a satisfactory outcome instead of the best outcome

11
Q

What is cognative bias

A

Rule of thumb - a rough method that can be applied when making decisions

12
Q

What is social norms?

A

Forms or patterns of behaviour considered acceptable by a society or grouo within that society

13
Q

What does rational mean?

A

Maximise self utility

14
Q

How is availibility a bias to decision making

A

Occurs when individuals make judgements about the likelihood of future events according to how easy it is to recall examples of similar events

14
Q

How is anchoring a bias to decision making?

A

Human tendency to rely on the first piece of information

14
Q

What is altruism

A

Charity
Not maximising self benefit

15
Q

What is choice architecture?

A

A framework setting out different ways in which choices can be presented to consumers and the impact of that presentation on consumer decision making

16
Q

What is loss aversion?

A

Peoples tendency to avoid making losses to acquire potential gains

17
Q

What are nudges

A

Try to alter ppls behaviours in a predictable way without forbidding any options or significantly changing economic incentives

18
Q

What is a default choice?

A

An option that is selected automatically unless an alternative is specified

18
Q

What is mandated choice?

A

People are required by law to make a decision etc picking whether to be an organ donor

18
Q

What is restricted choices?

A

Offering people a limited number of options so that they are not overwhelmbed by the complextity of the situation

Microeconomics (7 decks)

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