Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics Theme 1 A(s) Level > revise > Flashcards

revise Flashcards

1
Q

Specialisation definition

A

Specialisation occurs when workers are assigned specific tasks within a production process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Division of labour definition

A

Division of labour is when production is divided up into different stages to enable workers to focus on specific tasks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Price determination

A

set by demand and supply. Above the equilibrium line is consumer surplus, below is producer surplus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Price mechanism functions

A
  • Rationing (rations and allocate resources)
  • Incentive (should they buy?)
  • Signalling (reflects market conditions)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Market failure

A

When the price mechanism causes an inefficient allocation of resources leading to net welfare loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Types of market failure

A
  • Externalities
  • Under-provision of public goods
  • Information gaps
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Determinants of Price elasticity of supply

A
  • Level of spare capacity
  • state of economy
  • perishability
  • ease of entry
  • time period
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the characteristics of a public good?

A
  • non excludable

- non rivalry

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How do governments intervene?

A
  • indirect tax
  • subsidies
  • maximum/minimum prices
  • trade pollution permits
  • state provision of public goods
  • state provision of information
  • regulation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Government failure

A

When government intervention leads to an inefficient allocation of resources and net welfare loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Causes of government failure

A
  • distortion of price signals (misallocates resources)
  • unintended consequences
  • information gaps (government has insufficient knowledge to make rational economic decisions)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Animal spirits

A

Forces that make markets move in large booms and busts as people buy and sell impulsively rather than calmly using purely rational behaviour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what factors influence labour supply?

A
  • changes in productivity
  • changes in education and skill
  • demographic changes and migration
  • increased health spending
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

multiplier calc?

A
  • 1 / MPW
  • 1 / MPS + MPT + MPM
  • 1 / ( 1 - MPC )
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

output gap?

A

The difference between actual and potential GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Purchasing power parities

A

an exchange rate of one currency for another which compares how much a typical basket of goods in one country costs compared to that of another.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

CPI

A

a measure to examine the weighted average of prices of a basket of consumer goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Limits of cpi

A

doesn’t include housing costs

measures cost of living for AVERAGE household

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

RPI

A

an index used to measure inflation including housing costs

20
Q

Current account

A

measures trade in goods, services, investment incomes and current transfers

21
Q

Conflicts between objectives and policies

A
  • inflation vs cyclical unemployment
  • low growth vs balance of payments
  • high unemployment vs inflation or inequality
  • current account deficit vs unemployment
  • fiscal deficit vs unemployment / low economic growth
  • inequality vs long term economic growth
22
Q

demand for labour influences

A
  • technology
  • number of firms
  • product demand
23
Q

supply for labour influences

A
  • real wage rate offered
  • overtime options
  • barriers to entry (requirements)
  • net migration
24
Q

Government intervention in the market

A
  • price regulation (price capping RPI-X)
  • profit regulation
  • quality standards
25
Q

limits to government intervention in the market

A
  • regulatory capture

- asymmetric information

26
Q

Synergy is?

A

When a whole company is worth more than each company on their own

27
Q

Efficiencies

A
  • allocative (p = mc)
  • productive (mc = ac)
  • dynamic
  • x-effiency (within ac boundary)
28
Q

Perfect competition characteristics

A
  • many buyers and sellers
  • price takers
  • homogenous products
  • perfect knowledge
  • short run profit max
  • freedom of entry and exit
  • allocative efficiency
  • productively efficient
29
Q

monopolistic competition characteristics

A
  • imperfect competition
  • non homogenous products
  • many buyers and sellers
  • no barriers of entry
  • price markers
  • imperfect info
  • allocatively inefficient
  • x-inefficiency
30
Q

Oligopoly characteristics

A
  • high barriers of entry
  • high concentration ratio
  • interdependent
  • product differentiation
  • collusion (overt or tacit)
  • concentration ratios
31
Q

Monopoly characteristics

A
  • 25% market share
  • high barriers of entry
  • price maker
  • price discrimination (third degree)
  • allocative inefficient
32
Q

Third degree price discrimination

A

Charge different prices for the same good

33
Q

Monopsony characteristics

A
  • single buyer in the market

- price marker

34
Q

Contestability characteristics

A
  • access to technology
  • low entry or exit barriers
  • no sunk costs
  • low consumer loyalty
  • allocatively efficient
  • productively efficient
35
Q

Absolute advantage

A

When a country can produce a good using fewer resources and at a lower cost than other countries

36
Q

Comparative advantage

A

When a country can produce a good at a lower opportunity cost than another country

37
Q

Factors affecting the pattern of trade

A
  • comparative advantage
  • emerging economies
  • trading blocs
  • exchange rates
38
Q

terms of trade

A

measure of the rate of exchange of one product for another

39
Q

Terms of trade index

A

av import price

40
Q

Factors influencing terms of trade

A
  • Prebisch-singer hypothesis (over time commodity prices fall in relation to manufactured goods so the terms of trade for developing economies falls due to globalisation causing a fall in manufactured prices falling)
  • PED
  • Exchange rates (increase price better terms)
  • population size
41
Q

Current account influences

A
  • currency (higher, worse)
  • economic growth
  • deindustrialisation
42
Q

factors affecting exchange rates

A
  • speculation
  • inflation
  • gov debt
43
Q

marshall-lerner condition

A

devaluation in currency causes a increase in balance of trade if the absolute sum of long run exports and imports are greater than or equal to 1

44
Q

Kuznet hypothesis

A

as society moves from agriculture to industry there is more inequality since wages of industrial workers increase faster than farmers

45
Q

harrod damar model

A

investment saving and technology changes are needed for economic growth. If saving increases investment increases.

46
Q

Aid theorists

A
  • Moyo is against it bc it leads to private firms being unable to compete
  • Sachs is for it bc it can build up infrastructure
47
Q

Role of financial markets

A
  • facilitate savings
  • lend
  • facilitate exchange of goods and services
  • forward markets in currencies and commodities
  • provide market for equities

Economics Theme 1 A(s) Level (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions