Micro Flashcards
An indirect tax based on a percentage of the sales price of a good or service
Ad valorem tax
When the value that consumers place on a good or service equals the cost of the resources used up in production
Allocative efficiency
Factors making it expensive for new firms to enter a market
Barriers to entry
Branch of economics that studies the impact of psychological and social factors on economic decision making
Behavioural economics
An illegal market in which the market price is higher than a legally imposed price ceiling
Black market
Any factor that causes production to be delayed or stopped
Bottlenecks
They are schemes that seek to stabilise the market price of agricultural products by buying up supplies of the product when harvests are plentiful and selling stocks of the product onto the market when supplies are low
Buffer stock
The purchase by one organisation of large quantities of a product or raw material
Bulk-buying
A market that favours buyers because supply is plentiful relative to demand and therefore prices are relatively low
Buyer’s market
Something produced as a consequence of producing another good or service
By-product
The extent to which a business is making full use of existing factor resources
Capacity utilisation
Producer or capital goods are useful not in themselves but for the goods and services they can help produce in the future
Capital goods
Refers to the tools and technologies that are used to produce the goods and services we demand
Capital resources
A production technique which uses a high proportion of capital to labour
Capital-intensive
Economic system organised along capitalist lines uses market prices to guide our choices about the production and distribution of goods
Capitalist economy
The process of trapping and storing carbon dioxide produced by burning fossil fuels
Carbon capture and storage
An allowance to a business to generate a specific level of emissions
Carbon credits
A formal agreement among firms
Cartel
To simplify analysis, economists isolate the relationship between two variables by assuming ceteris paribus
Ceteris paribus
UK taxes on cigarettes
Cigarette duties
Any agreement between suppliers in a market to avoid competition
Collusion
Laws and regulation backed up by inspection and penalties for non-compliance
Command and control
Economic system where resources are allocated by the government
Command economy
Goods or services that have characteristics of rivalry in consumption and nonexcludability
Common resources