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Olly lundie my jigga > In-breast rates > Flashcards

In-breast rates Flashcards

1
Q

Advantages of specialisation

A

Gain skills in narrow range of tasks
Cost effective
Time saved
Specialise to best suited

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2
Q

Disadvantages of specialisation

A

Alienated fro work
Overspecialisation
Chain of production breakdown

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3
Q

Factors influencing demand

A

Income
Change in p of other goods
Population
Changes in taste and preferences

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4
Q

Factors affecting supply

A 
Cost of production
Change in p of other goods
Goals of sellers
Gov legislation
Expectation of future events (speculation)
Weather
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5
Q

PED

A

% Change in QD/%change in Price x100

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6
Q

YED

A

% Change in QD/%Change in Income x100

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7
Q

XED

A

% Change in QD of good X/% change in Price of Good Y x100

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8
Q

Factors in a market where all workers are paid the same

A

homogenous
perfect knowledge
perfect mobility
all workers and employers are price takers
no barriers to entry/exit
firms aim to profit maximise and minimise costs of production

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9
Q

Aims of a NMW

A

equity
incentives to work
discrimination

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10
Q

Disadvantages of a NMW

A

competitiveness and jobs (more expensive to employ)

relative poverty -boost income of middle class

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11
Q

Keynesian argument for NMW boosting employment

A

Higher wage rates will increase the disposable income of lower paid and feed through the circular flow of income

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12
Q

Factors affecting labour market flexibility

A 
mobility of labour
extent of labour migration
wage flexibility
skills and training
barriers to entry/exit
ability to hire and fire
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13
Q

Advantages of migration on labour markets

A 
Fresh skills
innovation
pressure on gov to reform
multiplier effects
reducing skilled labour shortages
country more attractive to FDI
income flows
tax revenues
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14
Q

disadvantages of migration on labour markets

A 
welfare costs
worker displacement
social pressures
pressures on property prices
benefit claims
risk of poverty
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15
Q

3 main functions in allocating resources

A

Rationing-limited supply, increase price to ration supply. Limited demand excess supply reduce price.
Signalling-changes in price give information to buyers and sellers which influence decisions to buy and sell.
Incentive-when changes in price encourage buyers and sellers to produce more and vice versa.

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16
Q

Competitive demand

A

2 or more goods are substitutes for each other

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17
Q

Composite demand

A

when a good is demanded for 2 or more distinct uses

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18
Q

Derived demand

A

when the demand for a factor, such as crude oil, is the result of demand for a good such as petrol

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19
Q

Joint demand

A

2 or more compliments are bought together

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20
Q

Joint supply

A

when 2 or more goods are produced together

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21
Q

2 ways firms grow

A

organic/internal

external

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22
Q

3 types of mergers

A

Horizontal integration- same industry, same stage of p
Vertical integration- different stage of p (forward or backward)
Conglomerate integration- no common interests

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23
Q

What happens to costs in the short run?

A

In the short run, a firm will have one factor input which cant be varied. If it were to increase output by using more of the variable factor inputs, diminishing marginal returns and the diminishing average returns would set in.

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24
Q

Fixed cost

A

costs which don’t vary as the level of output increases/decreases

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25
Q

Variable cost

A

costs which vary directly in proportion to the level of output for a firm

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26
Q

Average cost

A

total cost of production/level of output

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27
Q

Average variable cost

A

total variable cost/level of output

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28
Q

Average fixed cost

A

total fixed cost/level of output

29
Q

Marginal cost

A

cost of producing an extra level of output

30
Q

Total revenue

A

total amount of money received from sale

31
Q

Average revenue

A

average receipt per unit sold

32
Q

Marginal revenue

A

receipt from selling an extra unit of output

33
Q

When is productive efficiency achieved?

A

when production takes place at lowest average cost

34
Q

When is allocative efficiency achieved?

A

at an output level where the price equals the Marginal Cost (MC) of production, marginal benefit=marginal cost of p

35
Q

Factors that determine elasticity of supply for labour

A

Availability of suitable labour in other industry’s
time
extent of unemployment/underemployment

36
Q

Factors affecting mobility of labour

A

geographical

occupational

37
Q

What methods of labour do developed world use?

A

capital intensive

38
Q

what methods of labour do developing world use?

A

labour intensive

39
Q

When can the demand curve for labour shift?

A

if the marginal revenue product (mrp) of a given q of labour changes

40
Q

What causes shifts in demand curve for labour?

A

Physical productivity for labour changes

price of the product produced changes

41
Q

Determinants of elasticity of demand for labour

A

time
substitutes
EOD for product
proportion of labour cost to total cost

42
Q

What are the objectives of firms?

A 
survival
market share
growth maximisation
quality
social welfare
43
Q

What is the profit maximising point in perfect competition?

A

MC=MR

44
Q

How is a perfectly competitive firm productively efficient in the long run?

A

it operates in equilibrium at the bottom of the average cost curve

45
Q

How is a perfectly competitive firm allocatively efficient in the short run?

A

it operates where price=marginal cost

46
Q

Sources of monopoly power

A

barriers to entry
product differentiation
no.of near competitors

47
Q

How does a monopoly maximise profits?

A

by producing where MC=MR. it will base its prices on its average revenue curve, where output=average revenue

48
Q

Monopsony

A

only one buyer in the market

49
Q

Types of pricing strategies

A

price wars-driving down the price to below make even point
predatory pricing-established firm setting a price at which new firms cannot make profit
limit pricing-when firms set a low enough price to deter new firms from entering the market.

50
Q

Advantages of privatisation

A

cost-publically owned are x-inefficient as they have no incentive to cut costs
choice and quality
innovation
the invisible hand-stops misallocation of resources by gov
wider share ownership
reduction in public borrowing and state spending

51
Q

Disadvantages of privatisation

A

monopolys
equity
externalities

52
Q

Types of market failure

A 
externalities
under provision of public goods
information gaps
lack of competition
undersupply of merit/over supply of demerit
factor mobility
inequality
53
Q

Characteristics of a private good

A

rivalry, excludable

54
Q

Characteristics of a public good

A

non-rival and non excludable

55
Q

When do externalities arise?

A

when private costs and benefits are different from the social costs and benefits

56
Q

When do neg.ext occur?

A

if the social is higher than the private cost

57
Q

What is the market equilibrium for externalities?

A

MPC=(D=MSB=MPB)

58
Q

Reasons for price volatility (supply)

A

an adverse supply shock (natural disaster) can cause market prices to rise sharply, especially if PED <1

59
Q

Reasons for price volatility (demand)

A

rising market demand can also cause price spikes, especially when suplly elasticity <1

60
Q

forms of gov intervention

A 
indirect taxes
subsidies
max prices
min prices
regulation
provision of information
buffer sock schemes
61
Q

What are the conditions for indirect taxes to be effective?

A

the level of tax has to be set so that negative externalities are eliminated and the marginal social cost of production equals the marginal social benefit.

62
Q

What are the limitations of indirect taxes?

A

difficult to target-too big or too small, may be due to info failure
could be used to raise revenue-this may conflict when decisions are made about the size of the tax

63
Q

Ways subsidies can correct market failure

A 
increase output of merit goods
reduce inequalities
factor mobility
competition
information failure correction
64
Q

Problems with subsidies

A

difficult to target
conflict with other objectives (low taxes, reducing deficit)
difficult to remove

65
Q

Pros and cons of max prices

A

pros
more affordable

cons
supply falls
excess demand
those ale to buy previous good are better off (middle class)
some of the consumers wont be able to buy due to lac of supply
black markets

66
Q

Pros and cons of min prices

A

pro
raise price to the level where MSC=MSB

con
excess supply
black market

67
Q

Regulation pros and cons

A 
pros
reduce information gaps
deal w pollution 
easy to understand
cheap to enforce

con
difficult to enforce right level of regulation

68
Q

buffer stock schemes pros and cons

A

pros
stable prices
prevent sharp falls in prices
less price volatility

cons
expensive
free rider problem
min price usually too high

69
Q

Effects of gov intervention

A

-gov failure-underprovide Pub G, overprovide Priv good, leads to loss of economic welfare
-distortion of price signals-effect the price of goods
unintended consequences-e.g. EU enforced CAP, non -EU countries had too pay more for agricultural goods
-excessive administration costs-can be more of a cost than a gain e,g,unemployment schemes, people will use it because its advantageous instead of getting a job
-information gaps- rarely have the info to be effective

Olly lundie my jigga (3 decks)

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