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H2 econs definitions > Microecons > Flashcards

Microecons Flashcards

1
Q

Scarcity

A

Central econ problem, unlimited wants cannot be fulfilled by limited resources

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2
Q

PPC

A

shows all possible combinations of the maximum quantity of 2 goods a country can produce within a specified period of time with all its resources fully and efficiently employed at a given state of tech

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3
Q

Decision making process

A
  1. Final decision by econ agent
  2. Objective of EA
  3. Constraints faced (trade offs)
  4. Benefits and costs of this decision
  5. Weigh benefits and cost (B>C or C>B)
  6. Review decision (intended/unintended consequences/ int/ext changes)
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4
Q

DD

A

qty of the good that consumers are willing and able to consume at every given price over a given period of time ceteris paribus

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5
Q

Law of DD

A

at a given time the qty DD is inversely prop to its price ceteris paribus

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6
Q

EGYPT

A

Expectations
Gove policies
Income
Population
Price of related goods
Tastes and preferences

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7
Q

WETPIGS

A

**Weather **
Expectations of producers
Tech
Price of related goods
input prices
Gove policies
Sellers no of

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8
Q

Mkt eqm

A

intersection of DD SS curve, qty supplied exactly equal to qty dd at eqm price

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9
Q

Inferior goods

A

DD is negatively related to consumers Y

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10
Q

Normal good

A

DD is positively related to consumers Y

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11
Q

Substitures

A

alternative that can satisfy similar consumer wants

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12
Q

Complements

A

goods that enhance consumers satisfaction when consumed tgt

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13
Q

Price Elasticity of Demand (PED)

A

degree of responsiveness of the quantity demanded of a good
due to a change in its price, ceteris paribus.
PED = (% change in qty demanded of good A) / (% change in price of good A)

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14
Q

Income Elasticity of Demand (YED)

A

degree of responsiveness of demand of a good due to
changes in consumers’ income, ceteris paribus.
YED = (% change in demand of a good) / (% change in income)

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15
Q

Cross Elasticity of Demand (XED)

A

degree of responsiveness of demand of a good due to
changes in the price of related good, ceteris paribus.
XED = (% change in demand of good A) / (% change in price of good B)

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16
Q

Price Elasticity of Supply (PES)

A

degree of responsiveness of the quantity supplied of a good due
to a change in its price, ceteris paribus. PES = (% change in qty supplied of good A) / (% change in price of good A)

17
Q

TR

A

P x Q

18
Q

Consumer Surplus

A

the difference between the maximum amount price buyers are willing and able to pay for a good
and the actual price paid.
Measurement of consumer welfare

19
Q

Producer Surplus

A

difference between the price sellers are willing and able to sell a good and the
actual price they receive.
Measurement of producers welfare

20
Q

Price ceiling

A

Legally est max price
Set below eqm mkt price

21
Q

Price floor

A

Legally est minimum price
Set above eqm mkt price

22
Q

PC

A

many buyers/sellers
homo prod
perfect knowladge
no bte

LR normal profits

23
Q

MPC

A

diff products
imperfect info
low bte
no dom firm

SR all 3
LR normal prof

24
Q

Oligopoly

A

homo/diff products
a few dom firms
high bte
imperf info

SR all 3
LR Supernormal

25
Q

Monopoly

A

Single producer
high bte
imperf info
no substitutes

Supernorm/norm profits

26
Q

Profit max

A

mc=mr output

27
Q

Allocative eff

A

P=mc
scarce resources allocated to produce a combi of g+s most wanted by society
cannot make someone better off without making someone worse off

28
Q

Dynamic eff

A

R&D

29
Q

Productive eff

A

FIRM: any point on LRAS
SOCIETY: LOWEST point on LRAS

30
Q

Law of diminishing marginal returns

A

more qty of a variable factor used in combination with a given qty of fixed factor, theres a pt where an additional unit of the variable factor produces less output

31
Q

IEOS

A

unit cost reductions as a result of expanding the firms scale of prod

32
Q

IDOS

A

unit cost increments as a result of the firm overexpanding its scale of prod

33
Q

EEOS

A

unit cost red as a result of the industry expanding

34
Q

EDOS

A

unit cost increments as a result of the industry overexpanding

H2 econs definitions (3 decks)

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