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Economics > mock revision > Flashcards

mock revision Flashcards

1
Q

what are the factors of production

A

land
labour
capital
enterprise

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2
Q

what is opportunity cost

A

cost of giving up the best alternative when a choice is made

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3
Q

what is division of labour

A

specialisation of individuals in a work force

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4
Q

what are the advantages and disadvantages in the division of labour

A 
advantages :
gain skill 
more productive
more cost effective 
quicker 
disadvantages:
no sense of ownership
quality issues
boredom of workers
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5
Q

what is demand

A

quantity of a good or services that consumers are able and willing to buy at various prices

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6
Q

what are the conditions of demand

A

change in population
change in disposable income
price and availability of other goods
change in taste and preferences

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7
Q

what is consumer surplus

A

difference between what consumers are willing to pay and the price they actually pay

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8
Q

what is producer surplus

A

difference between what sellers are willing to sell product for and the price they actually do sell them for

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9
Q

what is supply

A

quantity of a good that suppliers are able and willing to sell at any given price

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10
Q

what shifts supply

A

change in cost of production
change in technology
change in price of substitutes
government tax

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11
Q

what are complements

A

goods which are demanded together

a rise in the quantity demanded of one will lead to an increase in demand for another

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12
Q

what are substitutes

A

goods which replace each other

rise in price of one will lead to rise in demand for another

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13
Q

what is derived demand

A

goods that are demanded for production of other goods

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14
Q

what is composite demand

A

goods which are demanded for two or more purposes

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15
Q

what is joint supply

A

one good supplied for two different purposes

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16
Q

what is PED

A

price elasticity of demand measures responsiveness to demand after a change in price

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17
Q

what is the equation of PED

A

% change in quantity demanded / % change in price

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18
Q

what is the elasticity of a product if its PED is between 0-1

A

inelastic

19
Q

what is the elasticity of a product if its PED is more than 1

A

elastic

20
Q

what is YED

A

measures responsiveness of demand to a change in income

21
Q

what is the equation of YED

A

% change in quantity demands / % change in income

22
Q

what is a normal good

A

brought more of when income goes up

23
Q

what YED do normal goods have

A

positive between 0 -1

24
Q

what has a YED of above 1

A

luxury goods

25
Q

what YED do inferior goods have

A

negative yed

26
Q

what is XED

A

measures demand for one good in responsive to a change in price of another good

27
Q

what is the equation for XED

A

% change in quantity demanded for good X / % change in price of good Y

28
Q

What XED do substitutes have

A

positive

29
Q

what XED does complements have

A

negative

30
Q

if XED is positive and more than 1 they are?

A

strong substitutes

31
Q

if XED is negative and less than -1 they are?

A

weak complements

32
Q

why is the demand curve for labour downward sloping

A

as wage rate rises firms will cut back on employment

33
Q

what causes a shift in demand for labour

A 
changes in productivity 
changes in revenue by a firm 
rise in customer demand 
change in price of good
employment subsidy
34
Q

what does the elasticity of labour depend on

A

time -the longer the time the easier to substitute labour for capital
labour costs as % of total costs
ease and cost of factor substitution
PED

35
Q

why is the supply curve for labour backward sloping

A

at high levels of income workers prefer to work shorter hours rather than receiving extra income

36
Q

what does the elasticity of labour depend on

A

time - elasticity lower in short run
availability of suitable labour - easier to get unskilled workers
unemployment

37
Q

what are the withdrawals from the circular flow

A

savings
tax
imports

38
Q

what are the injections from the circular flow

A

investment
government spending
exports

39
Q

what is aggregate demand

A

total of all demand curves in the economy

40
Q

what is AD made up of

A

consumption
investment
government spending
net exports (exports - imports)

41
Q

what causes shift in the AD curve

A

change in any variable of ad

eg . unemployment cuts consumption

42
Q

what is aggregate supply

A

total of all supply curves in the economy

43
Q

what causes shifts in the short run AS curve

A 
wage rates 
raw material prices
taxation
exchange rate 
productivity
44
Q

what causes shifts in the long run AS curve

A 
technological advances 
productivity in competing economies
change in skill and education 
demographic changes
competition policy

Economics (14 decks)

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