Brainscape's Knowledge GenomeTM

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


See full index

Economics > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

Ad Valorem Tax

A

An indirect tax imposed on a good where the value of the tax is dependent on the value of the good

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

Asymmetric Information

A

Where one party has more importation than the other leadings to market failure

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

capital goods

A

good produced to aid production of consumer goods in the future

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

ceteris paribus

A

all other things remaining the same

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

Command economy

A

all factors of production allocated by the state, government intervention, no private enterprise eg north korea

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

complementary goods

A

negative XED, if good B becomes more expensive, demand for good A falls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

consumer goods

A

goods brought and demanded by households and individuals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

consumer surplus

A

the difference between me paying the price the consumes is willing to pay and the price they will actually pay

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

Cross elasticity of demand

A

XED: the responsiveness of demand for good a to a change in price of good b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

demand

A

quantity or good/service that consumers are able and willing to buy at a given price at a given moment

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

Diminishing marginal utility

A

the extra benefit gained from consumption of a good generally declines as extra units are consumed; explains why demand curve is downward sloping

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

division of labour

A

when labour becomes specialised during the production process so do a specific task in cooperation with other workers

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

economic problem

A

problem of scarcity: wants are unlimited but resources are finite so choices have to be made

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

efficiency

A

when resources are allocated optimally so every consumer benefits and waste is minimised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

enterprise

A

one of factors of production , the willingness and ability to take risks and combine the three other factors of production

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

Externalities

A

The cost or benefit a third party receives from an economic transaction outside of the market mechanism

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

Free market

A

no gov intervention, resources allocated by price mechanism

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

free rider problem

A

people who do not pay for public good but still receive benefits from it so private sector will under provide the good as they cannot make profit from it

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

government failure

A

government intervention leads to net welfare loss in society

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

indirect tax

A

tax expenditures which increases production costs and lead to a fall in supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The economic problem

A

Humans have infinite wants and needs. but only have finite resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Utility

A

Satisfaction that consumers get from the goods and services that they
buy

23
Q

PASIFIC

A

Non-price factors that influence demand

24
Q

Excess demand

A

There are market shortages

25
Q

Excess supply

A

There are unsold goods in the market

26
Q

Producer surplus

A

The extra amount of money that producers are paid, above what
they would be willing to take

27
Q

Direct tax

A

A tax that is paid straight from your income

28
Q

Indirect tax

A

A tax is a tax on spending

29
Q

Tax incident

A

This is the idea of WHO actually pays the tax, the consumer or the producer

30
Q

subsides

A

A grant given to a firm to encourage the firm to produce more
and/or lower the price of its goods.

31
Q

Reasons for irrational behaviour

A

Influence of others
Habitual behaviour
Computational problems
Inertia

32
Q

Public goods

A

Goods that are non rivalrous and non excludable

33
Q

Non excludable

A

When you have produced the good and sold it to one person, it is
impossible to stop other people from using it

34
Q

Non-rivalrous

A

This means that as more and more people use the good or service,
the amount available to others is NOT reduced

35
Q

Market failure

A

when the free market causes an inefficient allocation of

resources

36
Q

externalities

A

These are the costs or benefits that are ignored in a market

exchange

37
Q

Maximum price

A

A price ceiling - when the Government sets a price that it will not allow the market price to rise above.

38
Q

Minimum Price

A

A price floor - when the Government sets a price that it will not let the market price fall below

39
Q

Tradable pollution permits

A

These give companies a legal right to pollute a certain amount per
fixed time span and can then sell their surplus pollution permits

40
Q

gov failure

A

This is when a Government intervention (public spending, taxes or
regulations) leads to a net welfare loss.

41
Q

regulation

A

law enacted by the government that must be followed by economic agents to encourage a change in behaviour
•non market based approach

42
Q

Command/ control of regulations

A
  • bans, limits, caps, compulsory, innovative regulations

* enforcement, punishment

43
Q

regulations …

A
  • incentive to change behaviour
  • solve issues in free market
  • result in: allocative efficiency and welfare gain
44
Q

disadvantages to regulations

A
  • cost, enforcement of policy (control)
  • setting the right regulation (command)
  • black markets and unintended consequences
  • equity, may not be fair for all as it’s not their fault
45
Q

specialisation of labour

A

•business focuses on making a particular good or service

46
Q

how does division of labour result in increased wealth ? give an example

A
  • increased productivity due to repetition and the incorporation of automation as well as less time switching between tasks
  • pin factory by adam smith, one worker makes the head, the other the bottom then another assembles the pin
47
Q

advantages of specialisation and division of labour

A
  • increased output- repetitive nature of specialisation, workers develop greater skill in particular task, produce more
  • less wastage- workers become skilled, less mistakes, less time so efficient
  • lower unit costs- economies of scale gained from increased output cause unit costs to decrease e.g. output increases, buy in bulks and gain greater discounts
48
Q

disadvantages of specialisation and division of labour

A

•boredom- less productive, workers have to be paid more as compensation of monotony of their work

49
Q

determinantes of demand

A

PASIFIC

50
Q

determinantes of supply

A 
Cost of production 
Alternatives (profitability) 
Complements (profitability) 
Unpredictable events
Expectations of price in future 
Number of Supliers
51
Q

why is S upwards slopping ?

A

more prices means more revenue
more output means more costs and more prices
more competition means more quantity supplies

52
Q

non-excludable

A

impossible to stop other people from using it when sold to one

53
Q

non-rivalrous

A

more usage does not affect availability

54
Q

free rider problem

A

provide good to one need to provide for all, people come and use it without paying

Economics (3 decks)

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