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A2 Economics > Micro > Flashcards

Micro Flashcards

1
Q

Define Behavioral Economics

A

Method of Economics Analysis that applies physiological insights to human behaviour to explain how individuals make choices and decisions

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2
Q

Define Rational Man

A

Self Intrest motivates people to elevate well-being and maximise ability

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3
Q

Define Utility

A

Satisfactiom or Welfare an individaul gains from consuming goods or services

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4
Q

Define Rule of Thumb

A

Rough or practical method/procedure that can easily be applied whne making decisons

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5
Q

Example of Rule of Thumb

A

Norm of we meet on a Friday

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6
Q

Define Bounded Rationality

A

Individuals ratioanlity is limited by information they have, limited minds and finite amount of time avalibale when making decisions

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7
Q

Example of Bounded Rationality

A

Choosing a new TV based reading few reviews and listening to friends despite lases man offering better deal

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8
Q

Define Bounded Self Control

A

Limited Self-Control where individuals lack control to act as what we as own self-interest

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9
Q

Example of Bounded Self Control

A

Valuing the now more than the future when making the big decisions

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10
Q

Define Fairness

A

Quality of being impartial involves treating people equally and not been taken advantage of them

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11
Q

Example of Fairness

A

Paying 1% to fund better public services

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12
Q

Define Choice Architecture

A

Framework setting out different ways which choices can be presented to consumers and impact of presentation on consumer decision making

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13
Q

Example of Choice Architecture

A

Getting children to eat healthier with layout of canteen

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14
Q

Define Framing

A

How something is presented influences choice made

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15
Q

Example of Framing

A

Labelling something as 90% fat-free instead of 10% fat to make it more appealing

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16
Q

Define Cognitive Bias

A

Mistake in reasoning or other mental thought processes occurring regardless of other information

17
Q

Example of Cognitive Bias

A

People tend to focus on bad news over good news

18
Q

Define Availability Bias

A

Individuals make judgements about future based on similar events

19
Q

Example of Availability Bias

A

After reading, news reports about thefts people may think there is high chance of it happening than there really is

20
Q

Define Anchoring

A

Human tendency when making decisions to rely heavily on the first piece of information given

21
Q

Example of Anchoring

A

Picking apparently reasonable price objects becuase of one expensive one

22
Q

Define Social Norms

A

Pattern/Forms of behaviour that are considered acceptable

23
Q

Example of Social Norms

A

Attitudes towards drinking alcohol is negative norm

24
Q

Define Economic Sanctions

A

Restricting imposed by regulation that restricts individuals freedom to behave

25
Q

Example of Economic Sanctions

A

Laws banning smoking in public places

26
Q

Define Nudges

A

Factors that encourage people to think and act in a particular way

27
Q

Example of Nudges

A

Healthy food at check out

28
Q

Define Altruism

A

Concern for the welfare of others

29
Q

Examples of Altruism

A

Young children helping others when they fall

30
Q

Define Default Choices

A

Option that is selected automatically unless alternative specified

31
Q

Examples of Default Choices

A

Organ donation is now opt out

32
Q

Define Mandated Choice

A

People required by law to make decision

33
Q

Example of Mandated Choice

A

Microsoft software installation boxes that appear on computer screens

34
Q

Define Restricted Choice

A

Offering people limited number of options so they are not overwhelmed by complexity of situation

35
Q

Example of Restricted Choice

A

Limited amount of items on a menu so there less choice

A2 Economics (2 decks)

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