key 5 marker knowledge mark words micro

Question 1

productive efficiency

Answer 1

maximising output with our resources

Question 2

output

Answer 2

goods and services produced by an economy in its private and public sectors in a given time period

Question 3

economic growth

Answer 3

a rise in the total amount of goods and services produced in an economy over time/the rate of change in output

Question 4

capital

Answer 4

goods that produce other goods

Question 5

allocative efficiency

Answer 5

consumers get what they want

Question 6

land

Answer 6

all natural resources used to produce goods and services

Question 7

labour

Answer 7

all human effort, physical and mental, to produce goods and services

Question 7

consumer good

Answer 7

goods made for immediate satisfaction when used or consumed

Question 8

economic incentive

Answer 8

making a decision you wouldn’t otherwise make because of the potential gain from the risk

Question 9

market

Answer 9

where buyers and sellers mee up and agree on a price

Question 10

free market

Answer 10

people can buy and sell goods and services without governments intervening

Question 10

demand

Answer 10

the quantity of a product consumers of a market are willing to pay

Question 11

supply

Answer 11

the willingness and availability to sell a product at any given price over some given period of time

Question 12

short run

Answer 12

at least one fixed factor of production

Question 13

demerit good

Answer 13

bad for consumers

Question 14

choice architecture

Answer 14

choices presented to consumers so they’re nudged to opt for choices that are in their best interest to achieve a socially desirable outcome

Question 15

opportunity cost

Answer 15

the rejected option when making a decision

Question 16

planned economy

Answer 16

controlled from the centre by the government

Question 17

market economy

Answer 17

allocation of resources and prices of goods and services are determined by the markets supply and demand

Question 18

free market

Answer 18

people can buy and sell goods and services without the governments control

Question 19

profit

Answer 19

the reward gained from taking a risk/ the difference between total revenue and total costs

Question 20

consumer surplus

Answer 20

people pay less for a product than they are willing to

Question 21

producer surplus

Answer 21

the minimum price firms are willing to sell their product at

Question 22

subsidy

Answer 22

gift of money from the government to encourage production (don’t need to pay back)

Question 23

normal good

Answer 23

the better quality alternative

Question 24

inferior good

Answer 24

the lower quality good

Question 25

market mechanism

Answer 25

price adjusts to meet a new equilibrium