microeconomics Flashcards
define complement goods
Goods that are bought as they’re used together i.e: Eggs & bacon
what is the most efficient form of market?
competitive market
what is a joint supply & give an example.
Different goods that can be made from the same product i.e cows, pigs…
define substitutes
Goods can be used instead of one another
describe:
effective demand
Initial demand
market demand
- willing to pay the price/ availability of money.
- How much 1 person is willing to pay.
- all individual demand together.
what is an inverse relationship
price goes up, demand falls
Contraction:
movement along the curve
extension:
rise in demand caused by fall in price
elasticity meaning
price of one goes up, the other will change. change in demand or the amount supplied in response to price or income changes.
what is productivity?
how is it measured?
- A measure of efficiency of factors of production
- Measured by output per person employed
- Or output per person per hour
what is production?
how is it measured?
Production is a measure of the value of outputs of goods and services e.g. measured by national GDP or an index of production in specific industry such as car manufacturing
economies of scale
The cost advantages from expanding the scale of production in the long run. The effect is to reduce average cost over a range of output.
two examples of internal and external EOS
Internal EOS: - expansion of the firm itself - lower long run average cost External EOS: - expansion of the industry - benefits most/ all firms
what is price elasticity of demand & the formula.
PED measures the responsiveness off demand after a change in the goods owned.
% change in QD/ % change in price
a command economic system
A command economic system is a system where the government determines what goods are produced, how much is produced and the price at which the goods will be sold at.
