Micro T1

Question 1

What is a social science -

Answer 1

The study of society and the relationships of individuals within

Question 2

Given an examply of eco as a social science

Answer 2

Supply and demand theory

Question 3

What is a value judgement

Answer 3

A statement based on a view or opinion

Question 4

What is a normative statement

Answer 4

Statements that cannot be rejected by looking at facts, they cannot be measured and are ethical and moral

Question 5

What are positive statements

Answer 5

Statemetns that can be tested against real world data

Question 6

Are positive statements true

Answer 6

No not always

Question 7

What is eco activity

Answer 7

The production distribution and consumptions of goods and services

Question 8

What is eco welfare

Answer 8

The benefit individuals gain from allocation fo resources

Question 9

What is the point of eco activity

Answer 9

Satisfy wants and needs with goods and services

Question 10

What are key economic descions

Answer 10

What to produce
How to produce
Who is beneifted from the good or service produced

Question 11

When will economic welfare increase

Answer 11

When wants and needs are catered for

Question 12

What is a fundemental economic problem

Answer 12

Scarcity

Question 13

What is scarcity

Answer 13

The lack of resoruces

Question 14

What are some consequences of scarcity

Answer 14

Wants and needs not met
Opportunity cost
Conflict in how to allocate resources
Allocation resource will not benefit all

Question 15

What are the types of goods

Answer 15

Economic
Free

Question 16

What are economic goods

Answer 16

Goods which are scarce and have an opportunity cost

Question 17

What are free goods

Answer 17

Goods which have no opportunity cost

Question 18

What is welfare

Answer 18

The happiness of humans

Question 19

Is short term happiness always good

Answer 19

No it can lead to long term negative affects

Question 20

What is needed to create goods and services

Answer 20

The four factors of production

Question 21

What are the 4 factors

Answer 21

Land
Labour
Capital
Entrepreneuship

Question 22

What is the ultimate reward of the factors

Answer 22

Factor income - wages, rent, interest, profit

Question 23

Who are the key economic players

Answer 23

Consumers
Workers
Firms
Government

Question 24

What are the roles of consumers

Answer 24

To purchase products

Question 25

What is the role of workers

Answer 25

To manufcature

Question 26

What is the role of firms

Answer 26

To allocate resources

Question 27

What is the role of the government

Answer 27

To maintain a thriving economy

Question 28

What are some conflicting interest of the key players

Answer 28

Consumers want low prices, firms want high Workers want high wages, firms want low costs The goverment wants regulation and saftey, firms want low costs Consumers want good quality products, firms want low costs

Question 29

What is the free market

Answer 29

Where there is little government involvement, their main role is to ensure rules are fair

Question 30

What is an intervensionist economy

Answer 30

Where the government are involved in the markets mechanisms, etc

Question 31

What are some features of a free market economy

Answer 31

High value of things that are demanded and scarce Suppliers want to supply higher value products

Question 32

What is the incentive function

Answer 32

Where producers are encouraged to supply more when prices rise to gain more profit

Question 33

What is the signaling function

Answer 33

Where price changes, demonstrating; where resouces are required or not and what is scarce

Question 34

What will firms do if prices rise due to higher demand

Answer 34

Expand production to cater for higher demand

Question 35

What will firms do if there is excess suply in a market

Answer 35

Lower prices to eliminate the supply surplus

Question 36

What is the rationing function

Answer 36

When there is scarcity , therefore prices rise so only those willing and able to pay will purchase a product

Question 37

When does the rationing function occur on a graph

Answer 37

When S shifts to the right, and the equilibrium is higher on the demand curve

Question 38

What will households do when their is scarcity

Answer 38

Proportion their incomes

Question 39

What are ways to deal with scarcity

Answer 39

Leave it to the free markeet Leave it to the government

Question 40

How would the free market deal with scarcity

Answer 40

Distribute resources according ot consumer preferences as of their incentive for profit

Question 41

How would the government deal with scarcity

Answer 41

Distribute resources failry, to avoid issues and externatlities such as inequalityof distributions

Question 42

What is opportunity cost

Answer 42

The loss of choosing x instead of y

Question 43

What are some things that come under OC

Answer 43

Time Money Resources Life choices

Question 44

How can we improve the quality of our resources

Answer 44

Improve our 4 factors of production

Question 45

Why would improving labour improve the quality of our resources

Answer 45

As they are more: Skilled, knowledgeable, motivated

Question 46

What has the government done to improve human capital

Answer 46

Improved education Mandaotry education Subsidised training schemes

Question 47

Who came up with the idea of the division of labour

Answer 47

Adam Smith

Question 48

What is the division of labour

Answer 48

Where production is split for different groups of workers

Question 49

What are benefits of the division of labour

Answer 49

Specialisation

Question 50

What does specialisation lead to

Answer 50

Increased productive Higehr quality products Efficency Lower costs Economies of scale

Question 51

What does a production possibility diagram illustrate

Answer 51

The different features of the key economic problems

Question 52

What are some of the key economic problems

Answer 52

Scarcity Resource allocation Opportunity Cost trade offs Unemployment Eco growth

Question 53

When does productive efficiency occur

Answer 53

When there is minimum average costs Where there is little waste of resources

Question 54

Where will productive efficency be seen on the graph

Answer 54

On the boundary, but this doesnt mean they have the best combination of resources

Question 55

What is allocative efficiency

Answer 55

Where the resources used to produce a combination of goods and services, best match wants and needs

Question 56

What is there always going to be with allocative efficiency

Answer 56

Opportunity cost

Question 57

When on a PPB can you increase the production of 2 things?

Answer 57

When the economy either grow or production potential increases

Question 58

What does it mean if there is a point on the PPB

Answer 58

There is full productivity

Question 59

What does it mean if there is a point in the PPB

Answer 59

Resources are not being used to full capacity

Question 60

What does it mean when there is a point beyond the PPB

Answer 60

Nothing, it is not possible for there to be a point

Question 61

When would a PPB shift occur

Answer 61

When the capacity of the economy is increased

Question 62

How to increase a PPB

Answer 62

Increase labour productivit y Tech changes New resources

Question 63

What is a mixed economy

Answer 63

Where part of the economy is apart of the free market and part is managed by the government

Question 64

How do mixed economies occur

Answer 64

When most businesses are ran by private enterprise

Question 65

What part of the economy do the government manage

Answer 65

Public services Regulation

Question 66

Does any point on the PPB suggest they are using the best combination of resources to maxamise welfare

Answer 66

No

Question 67

When can you increase the production of both products

Answer 67

When the firm expands and grows the quantity of its resources

Question 68

How can you increase output and welfare

Answer 68

By changing the allocation of resources