AQA AS Economics Unit 1 Key Terms

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  • Created by: Darren
  • Created on: 28-05-13 18:23

Key terms

New words…..

Their meanings….

Opportunity cost

Value of what has to be given up to fulfil another want

Economic resources

Factors of production

Perfectly inelastic demand

Same quantity bought despite price

Perfectly elastic demand

Only one price paid despite quantity

Elasticity

How a good’s demand changes in relation to price

Functions of price mechanism

Rationing, signalling & incentive

Total revenue

PXQ

Marginal revenue

TR of 2nd lot – TR of 1st lot

Average revenue

TR/Q

Consumer surplus

Consumer could pay more for goods but doesn’t

Producer surplus

Producer could receive less 

Productivity

Total output/no of workers

Economies of scale

Decreasing LRAC

Diseconomies of scale

Increasing LRAC

LRAC

Long Run Average Costs

Internal economies of scale

1 firm

External economies of scale

All firms in that industry

Monopoly

One firm produces all of that good

Duopoly

Two firms produce all of that good

Oligopoly

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