micro (T1-T3) keywords Flashcards

1
Q

allocative efficiency

A

when econ resources = used to produce g+s that maximise econ welfare

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2
Q

allocative price function

A

prices allocated away from markets w excess supply to markets w excess demand

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3
Q

capital / producer goods

A

goods used in the production of other goods

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4
Q

consumer good

A

goods consumed by households to satisfy needs + wants

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5
Q

factors of production

A

inputs of the production process –> land + labour + capital + enterprise

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6
Q

finite resources

A

non-renewable resources that are becoming scarce

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7
Q

fundamental economic prob

A

deciding how to allocate limited amount of resources w infinite wants

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8
Q

normative statements

A

have value judgements + opinions that can’t be proved / tested

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9
Q

positive statements

A

statements w facts that can easily be proved / tested

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10
Q

opportunity cost

A

the next best alternative forgone when making a choice

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11
Q

production possibility frontier

A

curve that shows possible combinations of 2 products that can be produced w finite resources

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12
Q

competing supply

A

resources = used to produce 1 good or another (not both)

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13
Q

competitive market

A

many buyers + sellers & low barriers to enter + exit

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14
Q

complementary goods

A
  • in joint demand
  • often bought together
  • like airpods + iphones
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15
Q

incentive price function

A

price creates incentives for people to adjust their economic transactions

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16
Q

customer sovereignty

A

consumers = govern production in markets via exercising spending power

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17
Q

demand

A

consumer = willing + able to buy @ a given price + time

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18
Q

effective demand

A

‘demand’ that’s backed by the ability to pay for the g/s

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19
Q

disequilibrium

A

excess demand // supply

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20
Q

joint supply

A

change in supply of 1 good impacts the supply of another

when 1 good = produced, another is as well from the same raw materials

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21
Q

joint demand

A

D for 1 product = directly related to market for a related g/s

22
Q

composite demand

A

good used to make more than 1 type of product

23
Q

derived demand

A

demand for good that’s the input for another good

24
Q

elasticity

A

the proportionate responsiveness of a 2nd variable to a change in the 1st variable

25
excess demand
consumers want more than producers are willing to sell (bottom bit on graph)
26
excess supply
producers want to sell more than what consumers are willing to buy (top bit of graph)
27
PED
measured the responsiveness of demand after a change in price
28
YED
measures the responsiveness of a good's demand to a change in consumers' income
29
XED
measures the responsiveness of 1 good's demand to a change in the price of another good
30
price elasticity of supply
measures the responsiveness of a good's supply to a change in price
31
substitute goods
- in competing demand --> good that can be used in place of another similar good - has a +XED (competing demand)
32
supply
the quantity of a g/s that a producer = willing + able to sell @ a given price + time
33
average costs
'total production costs' / 'total output'
34
profit
'total revenue' - 'total costs'
35
avg revenue
'total revenue' / 'total output'
36
total cost
'total fixed costs' + 'total variable costs'
37
total revenue
'price of each good' x quantity sold | ↳ the total amount of income from the sales of goods / services that are related to the company's primary operations
38
diseconomies of scale
when long-run avg costs increase as output rise
39
economy of scale
when long-run avg costs decrease as output rises
40
external economy of scale
firms saving due to growth of the industry the firm is a part of
41
internal economy of scale
firms saving due to the actual firm's growth | ↳ a fall in average costs & a rise in input due to the growth of the firm
42
division of labour
diff workers performing diff tasks in a good's / service's production - limited specialisation
43
fixed costs
costs of production that don't vary w output
44
variable costs
costs from paying variable factors (amount of raw materials needed --> not constant)
45
specialisation
worker only performing a specific task // small range of tasks --> efficient
46
short run
time where at least 1 of the FOP = fixed and cannot be varied
47
long run
time where non of the FOP are fixed and can be varied
48
long run avg costs
long run cost per unit of output
49
long run production
50
production
set of processes that converts inputs into outputs
51
productive efficiency
minimised avg total costs
52
productivity
output per unit of input