Microeconomic terms end of Michaelmas term Flashcards
To get an A in the Block Test.
What is capital?
CAPITAL GOOD
A good which is used in the production of other goods or services.
Govt.
COMMAND ECONOMY
An economy in which governemt officials or planners allocate economic resources to firms and other productive enterprises.
Mixed economy
An economy that contains both a large market sector and a large non market sector in which the planning mechanism operates.
Market Economy
An economy in which goods and services are purchasedthrough the price mechanism in a system of markets.
Consumer Surplus
A measure of the economic welfare enjoyed by consmers: surplus utility recieved over and above the price paid for a good.
Producer Surplus
A measure of the economic welfare enjoyed by firms or producers: the difference between the price a firm succeeds in charging and the minimum price it would be prepared to accept.
Scarcity
The economy cannot cope with the amount of goods and services that people would like to consume.
Demand for something else.
Derived demand
Demand for a good or factor of production is wanted not for its own sake but as a consequence of the demand for something else.
Demand derived from the demand for another good.
D👆🏼 S👇🏼. Like milk, for butter and cheese.
Composite Demand
Demand for a good which has more than one use, which means that an incerase in demand for one use of the good reduces the supply of the good for an alternative use.
+1
Same material
Joint supply
When one good is produced, another good is also produced from the same raw materials, perhaps as a by product.
Market Equilibrium
When planned demand equals planned supply, where the demand curve crosses the supply curve.
Factors of production
Inputs into the pproduction process [e.g Capital, Enterprise, Land and Labour.]
Demand
The quantity of a good or service that consumers are willing and able to buy at given prices, in a given time period.
Supply
The quantity of a good or service that producers are willing and able to sell at given prices, in a given time period.
Productive efficiency
Economy - When it is impossible to produce more of one good without producing less of another.
Firm - When the average total cost of production is minimalised.
