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Economics

Economics "economic problem"

Keywords:
Effective demand: demand that is backed by the ability to pay.
Scarce resource: One in which demand at zero price would exceed the available supply.
Opportunity cost: The cost of the next best alternative, forgone (gave up) (e.g. time spent is time I could do…

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Keywords:
Ceteris paribus: all things held constant. (Latin)
Demand: quantity of goods or services that will be bought at any given price over a period of time.
Supply: quantity of goods or services that will be supplied at any given price over a period of time.

Market system/mechanism:
e.g.
This…

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Market forces are the freely acting changes in supply and demand.


Economics: Entrepreneur ,Economic welfare and Production curves

Keywords:
Thrift: Cautious
Entrepreneur: "a person who organizes and manages a business undertaking, assuming the risk for the
sake of the profit."

Entrepreneur:
"The engine which drives enterprise, is not thrift, but…

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· War.
· Natural disaster.
· Person in chargeDestructs own economy


Government intervention:

Demerit goods: Merit goods:
Taxes Subsidies
Restrictions (age and other) Provide good/service
Informational advertising/ negative advertising Invest in merit goods
Educate Government spending
Legislation (change in) ( ban advertisements)
Import controls

Taxes:







Public goods:
1.) non excludeable…

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Market mechanism: supply and demand

Quasi: mainly

Productive efficiency: produced at lowest cost (maximising output with a given input). Most out of

Allocative efficiency: resources used in the optimum way (what they are best at). Best use

Market failure: Where resources are inefficiently allocated due to imperfections in the working…

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Effective demand: Demand that is backed by the ability to pay.

Scarce resource: One at which demand at zero price would exceed supply.

Opportunity cost: The cost of the next best alternative forgone.

Factors of production: Resources available to an economy.

Land- Natural resource

Labour- Human

Capital ­ Manufactured resource.…

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Inferior goods: Commodities that are less in demand as consumer income rises

Consumer sovereignty: It is the power of consumers to decide what gets produced

Marginal cost: Marginal cost is the change in total cost that arises when the quantity produced changes

by one unit.

Inequality: Uneven distribution.

Social disparity:…

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there are two main types of factor immobility, occupational and geographical immobility.


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