Brainscape's Knowledge GenomeTM

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


See full index

Economics > Booklet 3 - Micro > Flashcards

Booklet 3 - Micro Flashcards

1
Q

Definition - excludable

A

a good is excludable if someone else can be prevented from benefitting from it
- a train ticket

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

Definition - rivalrous

A

a good is rivalrous if its consumption by one person affects someone else’s ability to benefit from it
- a lawnmower cant be used at the same time in different places

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

Definition - non-rejectable

A

a consumer cannot refuse the benefit of the good

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

Definition - private good

A

a good that is both excludable and rivalrous
- box of chocolates

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

Definition - public good

A

a good which is non-excludable, non-rivalrous and non-rejectable
- lighthouse

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

Definition - free-rider problem

A

if no one can be prevented from gaining the benefit without paying, nobody has an incentive to pay
- buskers

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

Definition - quasi-public good / non-pure public good

A

a good the shows some of the characteristics of public goods

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

Definition - signalling function

A

to give information to traders to enable them to plan their economic activity

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

Definition - incentive function

A

based on the signals, economic agents alter their behaviour

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

Definition - rationing or allocative function

A

to decide how resources are used

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

Definition - dynamic pricing

A

where prices change as demand changes

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

Definition - missing markets

A

when the incentive function of prices completely breaks down and market fails to come into existence or disappears completely

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

Definition - partial market failure

A

when a market does provide a good but in an allocatively inefficient quantity

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

Definition - tragedy of the commons

A

the effect of individuals acting in a way where their own self interest is contrary to what is best for society as a whole

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

Definition - merit goods

A

goods that are more beneficial for consumers then they realise
- fruit, exercise

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

Definition - demerit goods

A

goods that are more harmful for consumers then they realise
- alcohol

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

Definition - experience goods

A

a good you need to experience to know more about

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

Definition - search goods

A

a good that you will know the right product when you find it

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

Definition - asymmetrical information

A

one person knows more than the other

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

Definition - externality

A

a cost or benefit to a third party who is not directly involved in an economic activity or transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Definition - negative externality

A

a cost to a third party

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

Definition - positive externality

A

a benefit to a third party

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

Definition - marginal

A

relating to an increase of one unit

24
Q

Definition - marginal private cost (MPC)

A

the cost to those directly involved (producer) of one additional unit

25
Q

Definition - marginal external cost (MEC)

A

the cost to third parties not directly involved in the production/consumption of an additional unit of a good (for which they are not compensated)

26
Q

Definition - marginal social cost (MSC)

A

the cost to society as a whole of economic activity
MSC = MPC + MEC

27
Q

Definition - marginal private benefit (MPB)

A

the benefit to those directly involved (consumer) of one additional unit

28
Q

Definition - marginal external benefit (MEB)

A

the benefit of an additional unit of economic activity to those not directly involved (for which don’t pay)

29
Q

Definition - marginal social benefit (MSB)

A

the benefit to society as a whole from the production/consumption of an additional unit of a good
MSB = MPB + MEB

30
Q

Definition - privately optimal level of production/consumption

A

the quantity of a good that will be produced/consumed in a free market where MPB = MPC

31
Q

Definition - socially optimal level of production/consumption

A

the quantity produced/consumed of a good that would be best for society where MSB = MSC

32
Q

Definition - information failure

A

when the information is incomplete, inaccurate or unreliable

33
Q

Definition - Government failure

A

When government intervention in the economy leads to a misallocation of resources

34
Q

What are the 5 laws of unintended consequences

A
  • distortion of price signals
  • conflicting objectives
  • information gaps
  • excessive administrative costs
  • unintended consequences
35
Q

Definition - distortion of price signals

A

The government intervenes in a market in a way that price changes

36
Q

Definition - information gaps

A

Government doesnt have full, reliable information

37
Q

Definition - indirect tax

A

a tax on a good or service

38
Q

Definition - hypothecation

A

ring-fencing the revenue from a tax for a particular purpose

39
Q

Definition - subsidy

A

a sum of money given by the government in order to encourage the production of a good or service

40
Q

Definition - regulation

A

laws passed and enforced by the Government

41
Q

Definition - state provision

A

something that is provided by the Government

42
Q

Definition - tradable permits

A

permits that give the holder the right to emit a specific amount of pollutant

43
Q

Definition - marginal abatement cost

A

the cost of reducing the firms pollution by one unit

44
Q

What’s the 3 limitations to behave rationally

A
  • limited ability to process and evaluate information
  • information gaps
  • time available to make decision is limited
45
Q

Definition - utility-satisficing

A

settling for a level of utility which is acceptable to them instead of pursuing full utility

46
Q

Definition - bounded self control

A

having good intentions but lacking the self discipline to pursue the best option

47
Q

Definition - heuristics

A

a rule of thumb or mental shortcut

48
Q

Definition - anchoring

A

a piece of information skews someones’ perception that they base their decision

49
Q

Definition - availability bias

A

an economic agent misjudges the likelihood of an occurrence on the most recent evidence
- fall in demand for air travel after a plane crash

50
Q

Definition - altruism

A

acting out of concern for others

51
Q

Definition - choice architecture

A

designing the choices that people take in order that they might make better decisions

52
Q

Definition - framing

A

tendency of a person to be influenced by the context information is presented

53
Q

Definition - mandated choice

A

people forced to make a choice without a default being set

54
Q

Definition - restricted choice

A

giving less information so they aren’t overwhelmed

55
Q

Definition - nudges

A

encouraging people to change their behaviour without removing their choice

Economics (7 decks)

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