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econ (for realz this time) > year 1 micro definitions > Flashcards

year 1 micro definitions Flashcards

1
Q

scarcity

A

a situation that arises due to unlimited wants in face of limited resources

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2
Q

economic goods

A

goods that are scarce - limited supply

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3
Q

free goods

A

goods that arent scarce - unlimited supply

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4
Q

poverty

A

a situation in which individuals lack the basic necessities of life

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5
Q

firm

A

an organization that produces output

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6
Q

household

A

person or people who engage in economic activity as a single entity

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7
Q

utility

A

the benefit derived from consumption of a good or service

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8
Q

positive statement

A

a factual statement

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9
Q

normative statement

A

a statement involving a value judgement about what ought to be

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10
Q

value judgement

A

a statement based on your opinion or belief instead of facts

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11
Q

factor of production

A

resources used in the production process

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12
Q

trade off

A

a situation in which the choice of one option requires the sacrifice of another

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13
Q

Opportunity cost

A

the value of the next best alternative forgone

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14
Q

production possibility curve

A

a curve showing the maximum combination of goods and services that can be produced in a arbitrary time period

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15
Q

capital goods

A

goods used as part of the production process

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16
Q

consumer goods

A

goods produced for consumption

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17
Q

resource allocation

A

the way in which a societys productive assets are deployed

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18
Q

market economy

A

a market structure where the invisible hand is allowed to allocate all of a societies resources

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19
Q

centrally planned economy

A

when the government allocates all of a societies resources

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20
Q

mixed economy

A

where a combination of market forces and government intervention allocate resources

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21
Q

capitalism

A

a system of production in which there is private ownership of productive resources and individuals are free to pursue their objectives with little government interference

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22
Q

invisible hand

A

a term used by adam smith to refer to how a market independently allocates resources in a market economy

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23
Q

specialisation

A

the process of concentrating on a task or skill to become better at it

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24
Q

division of labour

A

a process whereby production is broken down into several steps and workers are assigned to each stage

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25
Q

market

A

a set of arrangements that allow transactions to take place

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26
Q

barter system

A

an economy without money

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27
Q

money as a medium of exchange

A

the function of money that allows transactions to take place

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28
Q

labour productivity

A

output per worker per unit of time

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29
Q

marginal principle

A

the idea that economic decisions are made based on small changes from the existing

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30
Q

rational decision making

A

a decision that allows an economic agent to maximise their objective

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31
Q

utility

A

the benefit from consumption

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32
Q

marginal utility

A

the addition utility from consuming an extra unit of a good or service

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33
Q

the law of diminishing marginal utility

A

the more units of a good that are produced the lower the utility from consumption

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34
Q

state provision

A

when the government decides which goods or services to provide and spends money providing them

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35
Q

price control

A

a legal minimum or maximum price

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36
Q

price floor

A

a legal minimum price

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37
Q

price ceiling

A

a legal maximum price

38
Q

cartel

A

an agreement between firms on output or price

39
Q

merger

A

2 or more firms joining to become a larger firm

40
Q

buffer stock

A

a scheme intended to stabilize the price of a commodity by buying excess supply in periods when supply is high and selling when supply is low

41
Q

legislation

A

laws created by government to enforce regulations

42
Q

regulation

A

rules created by government to control the activities of producers and consumers

43
Q

prohibition

A

an attempt to prevent the consumption of a demerit good by making it illegal

44
Q

information provision

A

when the government decides to educate the public to help consumers make better choices

45
Q

pollution permit system

A

a system whereby firms can buy permits to pollute up to a certain level

46
Q

polluter pays principle

A

an argument that states the the cost of pollution should be paid by the economic agent causing it

47
Q

property rights

A

legal control or ownership of a good

48
Q

contracting out

A

a situation whereby the public sector places activities in the hands of the private sector and pays for them

49
Q

competitive tendering

A

a process by which the public sector asks the private sector to bid for contracts to provide a good or service

50
Q

public private partnership

A

an arrangement by which a government service is funded and operated through the partnership of the government and private sector

51
Q

private finance initiative

A

a funding arrangement where the private sector builds funds and operates an asset in exchange for an annual payment

52
Q

individual demand

A

the demand for a good from a single household

53
Q

market demand

A

the demand from the market as a whole

54
Q

joint demand

A

a situation whereby demand for 1 product causes an increase in demand for another

55
Q

competitive demand

A

where there are multiple products that a consumer could choose from

56
Q

composite demand

A

where products have multiple uses - high demand for a product causes a decrease in demand for another

57
Q

movement along the demand curve

A

when demand remains constant but there is a change in price

58
Q

shift in the demand curve

A

when the factors affecting demand of a product change causing the demand curve to move

59
Q

individual supply

A

the amount of a product that a single firm is willing and able to supply

60
Q

market supply

A

the amount of a product that is supplied by the market as a whole

61
Q

joint supply

A

a situation in which the supply of one good is proportional to the supply of another

62
Q

consumer surplus

A

the difference between what a consumer pays and what they would be willing to pay

63
Q

producer surplus

A

the difference between the price that the producer sets and the lowest price they are willing to sell it for

64
Q

cetirus paribus

A

the assumption that all else remains equal

65
Q

market equilibrium

A

the intersection of supply and demand

66
Q

disequilibrium

A

a situation in which the market is producing at a point that isnt the intersection of supply and demand

67
Q

elasticity

A

the extent to which a change in one variable will affect another variable

68
Q

price elasticity of demand

A

the effect of price on demand

69
Q

income elasticity of demand

A

the effect of income on demand

70
Q

cross elasticity of demand

A

the effect of the price of one good on the demand for another

71
Q

price elasticity of supply

A

the effect of price on supply

72
Q

market failure

A

a situation in which the market allocates resources inefficiently

73
Q

marginal social cost

A

the cost to society of producing an extra unit of a product

74
Q

marginal social benefit

A

the benefit to society of producing an extra unit of a product

75
Q

marginal external cost

A

the cost to 3rd parties of producing an extra unit of a product

76
Q

marginal external benefit

A

the benefit to 3rd parties of producing an extra unit of a product

77
Q

marginal private cost

A

the cost to the household/firm who are consuming/producing a product

78
Q

Asymmetric information failure

A

When one part has access to information that the other doesnt

79
Q

Moral hazard

A

A situation in which one party engages in risky behaviour because they know that another party will bear the consequences

80
Q

Merit goods

A

good that are underconsumed because consumers dont understand their benefit

81
Q

Demerit goods

A

goods that are overconsumed because consumers dont understand the dangers associated with them

82
Q

Private goods

A

A good which can be consumed by a single person only

83
Q

Public goods

A

Goods that are provided without profit to all members of a society, usually by government

84
Q

Non rivalrous

A

Consumption from one person doesnt reduce the amount available for consumption by another person

85
Q

Non excludability

A

Consumption from one person makes it impossible to exclude others from consumption

86
Q

non rejectability

A

Once a good has been provided one cannot avoid consuming it

87
Q

Quasi public good

A

A good that has some features of a public good but not all

88
Q

Features of public goods

A

Non-rivalry
Non-excludability
Zero marginal cost of production
Non-rejectable

89
Q

Free riders

A

Those who benefit from a good or service without paying for it

90
Q
A

econ (for realz this time) (4 decks)

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