Economics

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What are economics goods and free goods?
economic goods: economics goods are goods that are priced relative to the demand

Free goods: these are goods that are not priced and has no demand like air, sand in the beach, pebbles, these are not always priced and they don't need to be
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List the four factors of production and its definition
Land - Nature that helps in production
Labour - workers that help for production
Capital - man made stuff that help in production like machinery
Enterprise - the idea of the production or one that assembles the production line to produce something
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What is opportunity cost
The next best thing foregone
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What is the basic economic problem
limited resources unlimited wants
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What is the mobility of the factors of production
This is how mobile the factors of production are when the company or the production need to move somewhere
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Name some non price factors for demand
Disposable incomes
Tastes and preferences
Population
Price of substitute goods/alternatives
Price of complementary goods
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Name some non price factors of supply
Change in the cost of factors of production
Improvements in technology
imposition of indirect tax or subsidy
Weather conditions
Changes in price of other products
A change in the number of suppliers
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What is PES
PES is the price elasticity of supply, this is the change in the supply in response to the change in the price
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What is PED
This is the price elasticity of demand, this is the change in demand in response to the change in price
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Equation for PED
%change in Q demanded
______________________

%Change in price
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Equation for PES
%change in Q supply
______________________

%Change in price
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What is PPC and what does it show
PPC is the production possibility curve and it shows how the firm could allocate resources effectively to produce as efficiently as possible
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What is market equilibrium and how does it look
Market is equilibrium is when the the demand curve and supply curve meet, this is a point where is the price is accepted by both the suppliers and the consumers
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What is market disequilibrium
If the products are not able to be moved from one place to another

If the product is not able to be stored

If the spare capacity is none
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What price inelasticity of demand
The movement of the curve would mean that the supply/demand is increased or decreased because of a price change
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What is price inelasticity of supply
The shift of the demand/supply curve is when the whole line moves out of its place to the left or right, if it moved to the right, then the demand/supply has increased, but if tis moved to the left then the demand/supply has decreased
The shift is more or
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what is the contraction in demand
Contraction in demand shows that the demand has decreased because an increase in the price
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what is the contraction in supply
A contraction in supply means that the supply has decreased because of the fall in price
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What is the extension in demand
an extension in demand is when there is a fall in price and the quantity demanded is a lot
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What is the extension in supply
This is when there is an increase in price and there is an increase in quantity supplied
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Explain the three factors that make the PES inelastic
If the products are not able to be moved from one place to another

If the product is not able to be stored

If the spare capacity is none
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What is perfect inelasticity of supply
A perfect inelasticity of supply means that the supply doesn't change at all in response to the price change and in its graph it's a horizontal line
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What is perfect inelasticity in demand
A perfect inelasticity of demand will mean that the consumers don't change no matter the price, they will buy it no matter what. This is represented by a straight line up to down in the graph
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what is the difference between the shift and movement of the demand or the supply curve
A shift in the demand or supply curve means that the whole line or curve has moved to the right or left. Right shift = increase, Left Shift = decrease

A movement in the demand or supply curve would mean that the point in the curve has moved elsewhere alo
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What is the mixed economy
The mixed economy is the economy that is controlled by the private firms and government
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What is the command economy
The command economy is the economy that is solely controlled by the government
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What is the market economy
Market economy is the economy that is controlled only with private firms but has a little bit of the government intervention
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What is the division of labour
it is the separation of work process into a number of tasks
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What is the public sector
Public sector is the government intervention in the economy
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What is the private sector
Private sectors are the firms that control the economy
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What is the primary sector in the sectors of the economy
The primary sector is the sector of people who get the raw materials for the end of the production like getting fish from the lake, or farmers
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What is the secondary sector in the sectors of the economy
The secondary sector is the sector of people who manufacture the products received form the primary sector, basically like packing the products ready to be sent out
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What is the tertiary sector in the sector of economy
this is the sector of people who are responsible for the service, such as giving advice to other businesses or to final consumers or the distribution of the goods or the sale of goods
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What are the advantages of the division of labour
the advantages of division of labour is that the work is more efficient
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What are the disadvantages of labour
the disadvantages of the division of labour is that
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What is the government policies to deal with the externalities
Taxation
subsidies
fines
regulation
population permits
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What is the effects of privatisation on consumers
the effects of this is that private firms try to gain as much profit as possible so therefore they will increase the prices for their products
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What are the effects of privatisation on workers
The imapact is the wage cuts and the insecurity of working for them, loss of jobs in pursuit of profits
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what are the effects of privatisation on businesses
They have the authority to anything in the company as it is theirs, they can increase the prices of their service or good and gain profits
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What are the effects of privatisation on the government
The effects is that the government will not have to worry about managing that land or part of the production, therefore tightening the budget constraints
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What is external costs of production?
this is something that is not directly costing the company or firm, this is like the pollution, it doesn't cost their business anything but externally, the environment is suffering.
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what are external benefits of production
this is the positive effects of having a business, like how the business of making water for example benefits the Earth
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What are social costs and its formla
Social costs are the sun of the private costs and the external costs
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What are social benefits and its formula
social benefits is the sum of the private benefits and the external benefits.
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What is total revenue and its calculations
total revenue is the amount of money you have gotten from selling all the products produced

= quantity produced X cost of the product
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What is total costs and its calculations
Total cost is the cost of producing everything

= Fixed costs + Variable costs
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What is total fixed costs and its calculations
Fixed cost is the costs that don't change respective to the output produced, this is the rent paid and so on.
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What is total variable costs and its calculations
This is the cost that does change in respective to the output produced
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What is total average costs and its calculations
Average costs is the variable cost and fixed cost divided by the total output produced

Variable Cost + Fixed Cost
_______________________________

Total Output Produced
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What is profit and its calculations
Profit is the total costs deducted from the revenue that you made, basically how much more money you made from the sales, if its negative, that means that you lost some money

Total revenue - Total costs
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What are some factors that may cause a shift in the demand curve.
Advertising
Income
Fashon and tastes
Price of substitute goods
Price of complementary goods
demographic changes
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Factors that may cause a shift in the supply curve
costs of production
changes in technology
indirect tax
subsidies
natural factors (natural disasters and weather)
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Is it true that consumers aim to maximize their benefits?

Is it true that businesses aim to maximize their profits?
True


True
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Reasons why consumers may not maximize their benefits.
Consumers are not good at calculating their benefits.

Consumers have habits that are bad to quit.

Consumers sometimes copy others' behaviours.
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Reason why producers are not always able to maximize their profit.
Producers may have managers that revenue maximize, or sales maximize.

Producers may prioritize caring for customers.

Producers may complete charitable work
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What is monopoly?
Monopoly is when the company has little to no competition at all, they have the most power over people than anyone other company.
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what is oligopoly?
oligopoly is the market where few large firms dominate the market for a particular product or service.

It is like Monopoly but, this time, it is not just one company that dominates the market, it is multiple big companies which have competition in betwe
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What re the features of oligopoly?
there is a non price war and a price war

There is collusion

there is also a lot
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what is non price war
Non price war is when then the few companies in the oligopoly are trying to give their consumers as much good things as possible so that the consumers buy more things from one company than the other companies,

These include, complementary goods, better c
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what is price war
Price war is when the companies are trying their best to reduce the price so that the consumers will buy the cheapest product in the oligopoly, but doing so they will result in more losses than profits.
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What is collusion
There are 2 types of collusion, illegal collusion (formal collusion) or legal collusion (informal collusion)
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Why is the collusion illegal
Collusion is illegal because in the agreement, the companies are willing to increase the price altogether which will be unfair for the consumers
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Other cards in this set

Card 2

Front

Land - Nature that helps in production
Labour - workers that help for production
Capital - man made stuff that help in production like machinery
Enterprise - the idea of the production or one that assembles the production line to produce something

Back

List the four factors of production and its definition

Card 3

Front

The next best thing foregone

Back

Preview of the back of card 3

Card 4

Front

limited resources unlimited wants

Back

Preview of the back of card 4

Card 5

Front

This is how mobile the factors of production are when the company or the production need to move somewhere

Back

Preview of the back of card 5
View more cards

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