Economic Methodology And The Economic Problem KW Flashcards

1
Q

Allocative efficiency

A

When economic resources are utilised to produce the combination of goods and services that maximise economic welfare

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2
Q

Allocative price function

A

Prices allocate resources away from markets with excess supply to markets with excess demand

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3
Q

What is capital?

A

Producer goods used in the production of other goods

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4
Q

What is ceteris paribus?

A

All other things being held constant

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5
Q

What is choice?

A

Selecting one of multiple alternatives when deciding how to allocate scarce resources

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6
Q

What is a consumer good?

A

Goods consumed by households and individuals
Used to satisfy needs and wants

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7
Q

What is economic welfare?

A

the economic satisfaction/wellbeing of individuals/households/groups in an economy

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8
Q

What is imperfect information?

A

When individual lack the information to make the best decision

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9
Q

What is the incentive price function?

A

Prices creating incentives for people to adjust their economic transactions

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10
Q

What is infrastructure?

A

Facilities required for an economy to function

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11
Q

What is a need?

A

Something necessary for human survival

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12
Q

What is a signaling price function?

A

Prices providing information to sellers and buyers
Influencing economic decisions

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13
Q

What is trade?

A

Buying and selling of goods and services

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14
Q

What is a want?

A

Something desireable, yet not necessary fro human survival

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15
Q

What are value judgements?

A

Statements that are subjective and based on opinion rather than factual evidence

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