Key Questions Flashcards
The central problem of economics is
Allocating scarce resources to meet society’s unlimited needs as well as possible
The production possibility illustrates?
The opportunity cost of producing one good in terms of the lost production of other goods
In economics a value judgment is best described as a judgement which
Is thought to be right or wrong
An inferior good is a good that
Consumers buy more of when their wage falls
The short run means
At least one factor of production is fixed
The consumers surplus is the difference in price we pay and
The price we are willing to pay
A consumers demand curve for a good shows?
The quantity desired by the consumer at all possible prices
Price elasticity of demand will always be negative unless
Consumers demand more of a product as price rises
A public good is a good that
Can’t be excluded from any consumers use
Which ONE of the following would shift the demand curve
The price of a substitute good rises
The equation for price elasticity demand is
Percentage change in quantity demand / percentage change in price
Seats in a football stadium tend to have what
Perfect inelastic supply
What is non price competition
When you use factors that aren’t price to make your profit more unique
What are some examples are NPC
Branding
Loyalty cards
What is the profit maximisation rule
The firm maximises profits by producing set quantity of output where marginal revenue is = to marginal cost
What are economies of scale
As the scale of production increases the average cost of production falls
What is the long run
Where all factors of production can be varied
What is perfectly inelastic
No matter what price change occurs it will not have impact of the price quantity demanded - perfect situation
