multiple choices Flashcards
scarcity means
Individuals must make choices
reason to subsides social housing
Free market makes inequalities of wealth
when money is used for exchange
trade will increase
benefits of private goods in market failure
social exceeds private
misallocation of recourses in monopoly occurs when
prices are high than under competitors
immobility of a factor of production- workers unwilling to
change jobs
market failure arises when
Positive externalities of consumption aren’t taken into account
what is a factor of production
land owned by firms
what is an example of government failure
overproviding merit good
source of monopoly power
granting of patent to pharmaceutical company
maximising economic welfare
highest privates
demerit good curve
mpb on the right
negative cross elasticity of demand for 2 goods
complementary
s1-s2
fall in wage of agricultural workers
merit goods are underprovided because
social benefits exceed private benefits
if index is the same
labour of productivity is identical
price elasticity of supply is effected by
stocks available
to achieve efficient level of availability government should
provide a subsidy
purpose of economic activity is to
satisfy needs and wants
to calculate price elasticity of supply
should be multiplied by price
the equilibrium price in a market is
the market clearing price
a market failure arises whenever firms
create externalities
supply curve shifts right because
higher prices lead to higher prophets
government provide education because
the private benefit is less than the social benefit
increase in petrol price reduces care journeys
rationing function
a firm will reduce costs of production as it expands output if it
benefits from specialisation
complete government failure exists
there is a missing market in the provision of public goods
oligopoly can be explained by
firms employing managers to decrease average costs
if a decrease in price of one good due to an increase in supply leads to a decrease in demand for another the 2 goods are in
competitive demand
a good in a table takes the least account of negative externalities
is the highest in external cost
demand reduces due to tough global competition (diagram)
demand shifts left
optimum output of a good for society on a diagram would be
MSC to the left
