Micro Flashcards by Emma Gandy

Name a company that uses specialisation and how this benefits them

Apple - different people code and design products - more innovative

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Name a successful free market country, their economic growth, and unemployment level

Singapore, 3.6% growth in 2022, unemployment 2.4%

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Name a country with a planned economy, and say how many live below poverty line

North korea, 60% below poverty line

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Name 3 examples of irrational decision making by consumers

Addiction to drugs

‘Herding’ - assuming majority opinion is correct

‘Status quo bias’ - sticking with what you always have due to laziness

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Name a good with an inelastic price elasticity of supply and why

Grapes as they are harvested once a year

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Name an example of a good with elastic supply and why

Fidget spinners as they are easy to make - only need plastic, firms can adopt easily

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Name a good that has changed equilibrium lots recently and why

Oil due to Ukraine war leading to supply shortage

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What is VAT rates or standard goods, and for reduced rate goods?

20% / 5%

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Name a good that has reduced VAT rate

Children’s car seats

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Name an example of british farmers being subsidised and how much is received

EU Common Agricultural policy - before Brexit received around 3.4 bn per year

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How many tons of coal did the UK use in 2019 and why is this bad?

9million, damage air quality and causes global warming

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Name 2 positive externalities in consumption

Going to university

Taking public transport

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Name 2 goods that would go underprovided in the free market due to the free rider problem

Street lighting

National defense

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Name an example of asymmetric information and how the government fixed this

Cigarettes- consumers didn’t know true risks, corrrected through adverts

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Name an intervention to reduce negative externality in consumption

High excise duty on cigarettes

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What is the fuel duty on petrol and diesel?

53p per litre

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What do some estimates put the cost of HS2 at, and how does this relate to asymmetric information?

Over £100bn - inflation due to COVID made it cost more, gov didnt know

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Name an example of subsidies in the UK to reduce negative externalities

UK gov funded electric vehicle chargepoint installation- reduces petrol emissions

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Name an example of maximum prices

Uni tuition fees capped at £9250

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Name an example of minimum prices

Scotland 2018 minimum unit pricing - 50p per unit of alcohol

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Name an example of tradable permits and a statistic of how this reduced emissions

EU emissions trading scheme, saved approx 1bn tonnes of CO2 pollution

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Name an example of state provision of public goods, and an advantage and disadvantage

Police

+ Safety

— Cost

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Name an example of government introducing regulation

18+ to buy alcohol

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Name an example of UK government failure and how much money was wasted

£37billion on failed UK test and trace scheme

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Name an example of a horizontal merger

Disney/Marvel

Name an example of organic growth with figures

Costa - opened 1000 more stores from 2009 to 2015

Name an example of vertical integration

Apple manufacturing chips used in Apple phones eBay/paypal

Name 2 examples of demergers

Ebay and Paypal Whitbread and Costa Coffee

Name an example of variable costs and fixed costs for Apple

Variable - packaging Fixed - Apple store rent

Name an example of monopolistic competition in the UK and how it fits the criteria (5)

Coffee - over 50k sellers (many firms) - similar but not identical products - little control over cost - relatively low barrier to entry - consumers have info

Name an example of natural monopoly

London underground

Name 2 example of non-price strategy in different industries

Asda/Mcdo/BA rewards points

Name 3 examples of a monopoly

Meta (owns FB + instagram + whatsapp) Apple Tesla electric cars

Name 2 examples of third degree price discrimination

Train tickets - railcards, buying in advance NHS/army/student discount

Name an example of predatory pricing

Darlington Bus War - Busways offered free buses which put its rival, the Darlington Travel Company, out of business

What is the National Minimum Wage for 18-20y/o and what is the National Living Wage?

£7.49 18-20 £10.42 23 and over (NLW)

What proportion of UK employees were trade union members in 2021? How does this compare with historical data?

2021: 23% Lowest rate since 1995

Name an example of an industry that has recently become more contestable and say why

Zips: YKK being challenged by Chinese companies which now have access to technology and labour

What percentage of the UK population are economically inactive

Almost 22% of working age adults aged 16-64

What is the gender pay gap in the UK?

Among all workers (fulltime and parttime) it is 15.4%

How many unfulfilled jobs are there in the UK?

In Q4 2022 was 1.1million, decreased since Q1

Name 2 industries with skill shortages

HGV drivers - UK gov funded trauning Health professionals

What is the median age of the UK population. and how has this changed over time

40.7 in 2021, was 38 in 2001 - increasing

What are the median earnings for fulltime workers in the UK? What is it in London, and what is it in Yorkshire

Apr 2022 - ONS says £33,280 London - £42k Yorkshire - £30k

Say the UK unemployment rate in Jan 2023

3.7%

Say the UK youth unemployment rate in Jan 2023

16-24 10.8%

Name an industry where automation has reduced demand for labour, and one where it won’t

Retail and food - Mcdonalds Teachers

Name an example of an industry with derived demand

Mobile phones and lithium batteries

UK net migration and why was it so high

504000 in 2022 - because of Ukraine and Hong Kong BNO

Name 2 examples of factors causing a shift in the individual supply of Labojr

Non-monetary benefits e.g canteen, pension Career progression opportunities

Name an example of geographic immobility of labour, and an example of a govern,ent policy to overcome this

House price difference- London is over £300k more expensive avergae price than Yorkshire Subsidies to those jobs w shortages - NHS

Name an example of occupational immobility of labour, and an example of a govern,ent policy to overcome this

UK coal miners 1993 - made £75mil available for coal miner retraining

Name an example of a retraining scheme to incentivise labour

Get Help to Retrain - available online

Name an example of a UK trade union and the impact it has had on workers

BMA - junior doctors strikes in Apr 2023

Name 2 examples of industrial action recently and why they took place

Apr 2023 junior doctor strikes as pay fallen relative to inflation Mar 2023 - Underground workers

Name an international policy to reduce the gender pay gap

Sweden - no parent should spent more than 3% of income on childcare, fees capped just over £100 a month

Name 2 example of an intervention in an indistry by the regulators and say what regulator

ORR - fined network rail £1.4mn for health and safety breaches OFCOM - love island complaints

Name 2 examples of CMA intervention and the outcome

CMA blocked Asda/sainsburys merger Currently investigating Microsoft/Activision blizzard merger

Name 2 example of a UK industry that was privatised

British Rail Royal Mail

Name a global and a domestic example of state owned businesses

UK - NHS China - Bank of China majority state owned

Name an example of derived demand for labour

University - if students sign up to course, uni will demand lectures to teach students

Name an example of regulatory capture in a specific industry

HMRC giving generous tax deals to Vodafone and Goldmans Sachs while it is investigating

Name 2 examples of monopsony

Supermarkets when buying produce from farmers Network rail for track maintenance

Name 3 examples of barriers to entry in specific markets

Legal barriers e.g Pharmaceutical in US Brand loyalty e.g Newspapers Economies of scale e.g coca cola

Name 2 examples of monopolistic industries

Cafés Nail salons

Name an example of an industry where government intervention has changed choice uk

Post - many couriers e.g Evri, Royal Mail, DHL

Name an example of an industry where government intervention has changed quality

Lancet study says that outsourcing NHS services led to increased deaths from treatsble causes and reduced care quality

Name an example of an industry where government intervention has changed efficiency

UK privatisation - £3billion losses in 1979 turned into surplus for government

Name an example of an industry where government intervention has changed profits

UK windfall tax in 2022 reduced profit as oil and gas companies made large profit during cost of living crisis

Name an example of an industry where government intervention has changed prices

Higher education - £9250 undergraduate price ceiling

Name an industry that shows purchasing economies of scale

Mcdonalds bulk buy beef etc

Name a firm that shows technical economies of scale

Mcdonalds order machines

Name an industry that shows managerial economies of scale

Mcdonalds area managers

Name a firm that shows marketing economies of scale

Mcdonalds tv ads

Name a firm that shows financial economies of scale

Larger firms get lower IR on borrowing e.g Apple borrowing instead of bringing money back to US where it has to pay 35% tax

Name a firm that shows risk bearing economies of scale

Pfizer - invest lots into researching new drugs as they have lots of resources and can afford to bear the costs

Name 2 case studies of contestable markets and say why they are

Walking/bus tours - low barriers to entry Online music - streamjng, buying albums, low barriers

Name an example of second degree price discrimination and say why it is

British Airways - charge lower price earlier it is booked

Name an example of an impact of Scotland’s minimum alcohol unit pricing

2023 study showed 13% fall in alcohol-related deaths since introduction

Name an example of increased contestablility in the airline industry

Open skies - Europe - Any airline allowed to fly routes, not just flag carriers