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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
Variable cost
costs which vary directly in proportion to the level of output for a firm
26
Average cost
total cost of production/level of output
27
Average variable cost
total variable cost/level of output
28
Average fixed cost
total fixed cost/level of output
29
Marginal cost
cost of producing an extra level of output
30
Total revenue
total amount of money received from sale
31
Average revenue
average receipt per unit sold
32
Marginal revenue
receipt from selling an extra unit of output
33
When is productive efficiency achieved?
when production takes place at lowest average cost
34
When is allocative efficiency achieved?
at an output level where the price equals the Marginal Cost (MC) of production, marginal benefit=marginal cost of p
35
Factors that determine elasticity of supply for labour
Availability of suitable labour in other industry's time extent of unemployment/underemployment
36
Factors affecting mobility of labour
geographical | occupational
37
What methods of labour do developed world use?
capital intensive
38
what methods of labour do developing world use?
labour intensive
39
When can the demand curve for labour shift?
if the marginal revenue product (mrp) of a given q of labour changes
40
What causes shifts in demand curve for labour?
Physical productivity for labour changes | price of the product produced changes
41
Determinants of elasticity of demand for labour
time substitutes EOD for product proportion of labour cost to total cost
42
What are the objectives of firms?
``` survival market share growth maximisation quality social welfare ```
43
What is the profit maximising point in perfect competition?
MC=MR
44
How is a perfectly competitive firm productively efficient in the long run?
it operates in equilibrium at the bottom of the average cost curve
45
How is a perfectly competitive firm allocatively efficient in the short run?
it operates where price=marginal cost
46
Sources of monopoly power
barriers to entry product differentiation no.of near competitors
47
How does a monopoly maximise profits?
by producing where MC=MR. it will base its prices on its average revenue curve, where output=average revenue
48
Monopsony
only one buyer in the market
49
Types of pricing strategies
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
Advantages of privatisation
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
Disadvantages of privatisation
monopolys equity externalities
52
Types of market failure
``` externalities under provision of public goods information gaps lack of competition undersupply of merit/over supply of demerit factor mobility inequality ```
53
Characteristics of a private good
rivalry, excludable
54
Characteristics of a public good
non-rival and non excludable
55
When do externalities arise?
when private costs and benefits are different from the social costs and benefits
56
When do neg.ext occur?
if the social is higher than the private cost
57
What is the market equilibrium for externalities?
MPC=(D=MSB=MPB)
58
Reasons for price volatility (supply)
an adverse supply shock (natural disaster) can cause market prices to rise sharply, especially if PED <1
59
Reasons for price volatility (demand)
rising market demand can also cause price spikes, especially when suplly elasticity <1
60
forms of gov intervention
``` indirect taxes subsidies max prices min prices regulation provision of information buffer sock schemes ```
61
What are the conditions for indirect taxes to be effective?
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
What are the limitations of indirect taxes?
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
Ways subsidies can correct market failure
``` increase output of merit goods reduce inequalities factor mobility competition information failure correction ```
64
Problems with subsidies
difficult to target conflict with other objectives (low taxes, reducing deficit) difficult to remove
65
Pros and cons of max prices
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
Pros and cons of min prices
pro raise price to the level where MSC=MSB con excess supply black market
67
Regulation pros and cons
``` pros reduce information gaps deal w pollution easy to understand cheap to enforce ``` con difficult to enforce right level of regulation
68
buffer stock schemes pros and cons
pros stable prices prevent sharp falls in prices less price volatility cons expensive free rider problem min price usually too high
69
Effects of gov intervention
-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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