Micro Year 2 Flashcards
Absolute poverty
When an individual or household is unable to purchase the basic necessities to sustain a civilised life
Adverse selection
Similar to asymmetric information , a situation in which people who buy insurance often have a better idea of their riskiness than the insurance provider
Allocative efficiency
Producing the mix of g and s that society values the most
Altruism
Acting with concern for others, especially the less fortunate
Anchoring
A bias in decision making where individuals rely too heavily on specific pieces of information
Average fixed cost
Total cost divided by output
Average revenue
The revenue per unit of output
Average variable cost
Total variable costs divided by output
Average total cost
Total costs ( TFC +TVC) divided by output
Capital market
Where securities such as shares and bonds are issued to raise medium to long term finance
Cartel
A collusive agreement by firms to fix prices and/or to restrict output
Choice architecture
The ways in which choices are presented to consumers, designed to encourage them to act in a socially desirable ways
Collision
Tacit agreement between firms regarding prices in order to raise profit
Competition policy
Gov efforts to prohibit anti competitive practices
Concentration ratio
The market share of the n biggest firms in an industry
