micro def(green)

Question 1

(the environment as an) absorber of waste

Answer 1

the environment absorbs waste produced by human activity

Question 2

Altruism (Y13)

Answer 2

humans often behave with more kindness and fairness than would be the case if they behaved ‘rationally’ in their own self-interest

Question 3

Anchoring (Y13)

Answer 3

the previous price that the person paid for the product, or perhaps the first price at which they were offered for the product, acts as an anchor and affects their consumption decisions in the future)

Question 4

Availability bias (Y13)

Answer 4

the human tendency to think that examples of things that come readily to mind are more representative than is actually the case

Question 5

Behavioural economics (Y13)

Answer 5

behavioural economics challenges the assumption of pure rationality in our decisions and shows that an individual’s economic decisions may be biased

Question 6

Behavioural nudge (Y13)

Answer 6

Any aspect of the choice architecture that alters people’s behaviours in a predictable way without forbidding any options or significantly changing economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid

Question 7

Bias (Y13)

Answer 7

a systematic, non-random error in thinking

Question 8

Bounded rationality (Y13)

Answer 8

the idea that the cognitive, decision-making capacity of humans cannot be fully rational because of a number of limits that we face

Question 9

Bounded self-control (Y13)

Answer 9

consumers often do not stop consuming even when it makes sense to stop

Question 10

Capital

Answer 10

man-made aids to production

Question 11

Capitalism

Answer 11

an economic and political system in which a country’s means of production are controlled by private owners for profit, rather than by the state

Question 12

Central purpose of economic activity

Answer 12

the production of goods and services to satisfy needs and wants

Question 13

Choice

Answer 13

an act of choosing between two or more possibilities

Question 14

Choice architecture (Y13)

Answer 14

a scenario in which the environment in which someone must made a decision / choice has been carefully designed in order to try and influence that decision

Question 15

Default choice (Y13)

Answer 15

the default choice or default option is the option that a consumer “selects” if he or she does nothing

Question 16

Economic growth

Answer 16

in the long-run can be defined as an expansion in the productive capacity of the economy, in the short-run an increase in aggregate demand and real GPD

Question 17

(Basic) economic problem

Answer 17

a situation in which there are limits resources to meet unlimited wants

Question 18

Economic resources

Answer 18

resources used in the production process; inputs into the production, including labour, capital, land and entrepreneurship

Question 19

Entrepreneurship

Answer 19

the willingness of an entrepreneur to take risks and organise production

Question 20

Factors of production

Answer 20

resources used in the production process; n puts into production, including labour, capitol, land and entrepreneurship

Question 21

Framing (Y13)

Answer 21

choices can be worded in a way that highlights the positive or negative aspects of the same decision, leading to changes in their relative attractiveness

Question 22

Goods

Answer 22

tangible things that can be bought or sold and finally consumed

Question 23

Heuristic (Y13)

Answer 23

rules of thumb that simplify decisions and represent a process of substituting a difficult question with an easier one

Question 24

Human capital

Answer 24

the skills, knowledge and expertise that workers posses (Chicago School)

Question 25

Incentive

Answer 25

something that motivates or encourages someone to do something

Question 26

Key economic decisions

Answer 26

what to produce, how to produce and for whom (Samuelson)

Question 27

Labour

Answer 27

the quantity and quality of human resources/ human capital input into the production process

Question 28

Land

Answer 28

natural resources in an economy

Question 29

Law of diminishing marginal utility

Answer 29

the decrease in the marginal utility derived with each addition unit of a good or service that is consumed

Question 30

Loss aversion (Y13)

Answer 30

people’s tendency to prefer avoiding losses to acquiring equivalent gains

Question 31

Mandated choice (Y13)

Answer 31

a situation or scenario in which people must decide in advance whether they wish to participate in a particular action

Question 32

Marginal utility

Answer 32

the addition utility gained from consuming an extra unit of a good or service

Question 33

Microeconomics

Answer 33

the branch of economics that studies behaviour and economic decisions made in individual households, firms and markets

Question 34

Need

Answer 34

something that is essential or very important and not just desirable

Question 35

Normative statement

Answer 35

a value judgment about ‘what ought to be’ which cannot be tested

Question 36

Opportunity cost

Answer 36

the cost of a decision in terms of the benefits of the next best alternative foregone

Question 37

Pareto optimum

Answer 37

an allocation of resources is said to be a Pareto optimum if no reallocation of resources can make an individual better off without making some other individual worse off

Question 38

Positive statement

Answer 38

a statement of fact about ‘what is’ which can be tested

Question 39

Production possibility curve/ frontier

Answer 39

a curve showing the maximum combinations of goods alot services that can be produced in a set period of time given available resources and the state of technology (if all resources are efficiently employed)

Question 40

Productive efficiency

Answer 40

attained when a firm operates at minimum average cost, choosing an appropriate rate combination of inputs (cost efficiency) and producing the maximum output possible from its inputs (technical efficiency)

Question 41

Property rights (Y13)

Answer 41

property rights confer legal control or ownership of a good

Question 42

(the environment as a) Provider of amenities

Answer 42

the environment provides direct utility (satisfaction / welfare) to people

Question 43

(the environment as a) Provider of resources

Answer 43

the environment and r idea inputs for the production of goods and services, this includes energy (from renewable or non-renewable sources) raw materials

Question 44

Rationality (in neoclassical economics) (Y13)

Answer 44

rational consumers wish to maximise their satisfaction or utility from consumption by correctly choosing how to spend their limited income

Question 45

Restricted choice (Y13)

Answer 45

restricting the number of available choices may be more likely to cause consumers to act and actually make a decision

Question 46

Scarcity

Answer 46

a situation which there are limited resources to meet unlimited wants

Question 47

Services

Answer 47

intangible activities provided by government, individuals and businesses

Question 48

Social norms bias (Y13)

Answer 48

our day-to-day behaviour is influenced strongly by what we understand to be the prevailing social norms or social customs. Social norms become accepted by the majority of a given community of people

Question 49

Social science

Answer 49

the scientific study of human society and social relationships

Question 50

Sustainability

Answer 50

if our choices today are to be sustainable choices, they must meet present needs without compromising future generations’ ability to meet their needs (Brundtland)

Question 51

Trade off

Answer 51

a trade off involves a sacrifice that must be made to obtain a certain product, service or experience, rather than others that could be made or obtained using the same required resources

Question 52

Utility

Answer 52

the satisfaction derived from consuming a good or service

Question 53

Want

Answer 53

a want describes a desire for something