Economics

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  • Created by: Richard
  • Created on: 22-03-14 11:31
Negative Externalities
Costs imposed on a third party, not involved with the consumption or production of the good.
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Marginal External Costs
The spill over cost to third parties of an economics transaction.
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Value Judgements
Statements or opinions expressed that aren't testable & depend on the views of the individual & the values they hold.
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Profit
When total income or revenue for a firm is greater than the total costs.
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Buffer Stocks
An intervention system aiming to limit the fluctuations of the price of a commodity.
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Factor Market
The market for the factors of production that make other goods and services such as labour or raw materials.
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Division of Labour
Breaking the production process down into a sequence of tasks, with workers assigned to particular tasks.
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Human Capital
The skills, motivation and knowledge of labour. Improvements raise productivity and shift the PPB right.
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Externalities
Costs or benefits that spill over to third parties who are external to a market transaction
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Specialisation
The production of a limited range of goods by an individual factor of production/firm/country, in co-op with others so they get a complete range of goods produced.
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Renewable Resources
Resources that are able to be replenished over time, whereas non-renewables such as oil and gas are likely to run out.
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Composite Demand
A good that is demanded for more than one purpose so an increase in demand for one purpose reduces the available supple for the other purpose, usually leads to higher prices.
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Derived Demand
When the demand for one good/service comes from the demand for another good or service. The demand for cars stimulates demand for steel.
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Demand
The amount that consumers are willing to pay for a good or service.
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Allocative efficiency
This is achieved in an economy when it's not possible to make anyone better off without making someone worse off, or you can't produce more of one good without producing less of another.
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Free goods
Goods that have no opportunity cost. Eg. Air.
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Monopoly
A market structure dominated by a single seller of a good
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Income Elasticity of Demand
The proportion to which demand changes when there is a change in income.
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Price Elasticity
The responsiveness of demand to a change in the price level. The formula is percentage change in quantity demanded divided by percentages change in price.
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Supply
The amount offered for sale at each given price level.
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Productivity
A measure of efficiency, usually labour, which is the output per worker.
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Opportunity Cost
The next best alternative sacrificed when an economic decision is made.
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Market Failure
Where the market fails to produce what consumers require at the lowest possible cost.
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Economic Goods
Goods that are scarce and therefore have an opportunity cost.
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Government Failure
When government intervention to correct market failure does not improve the allocation of resources or leads to a worsening situation. The costs of government intervention may therefore exceed the benefits.
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Joint Supply
When the production of one good also results in the another.
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Productive Efficiency
When a firm operates at minimum average total cost, producing the maximum possible output from inputs into the production process.
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Goods
Tangible products, e.g. CDs or a car
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Services
Non-tangible products, e.g. Train/Taxi journey
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Normal goods
Goods and services that will see an increase in demand when incomes rise.
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Inferior Goods
Goods and services that will see demand fall when income rises.
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Economies of scale
Where an increase in the scale of production leads to reductions in average total cost for firms.
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Free market economy
One in which there's very limited gov. involvement in providing goods and services. It's mainly for ensuring the rules of the market are fair so that, for example people cannot steal each other's property.
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PPB (production possibility boundary)
Indicates the maximum possible output that can be achieved given a fixed set of resources in a particular time period
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Economic Welfare
The benefit and satisfaction individuals or society gets from the allocation of resources.
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Other cards in this set

Card 2

Front

The spill over cost to third parties of an economics transaction.

Back

Marginal External Costs

Card 3

Front

Statements or opinions expressed that aren't testable & depend on the views of the individual & the values they hold.

Back

Preview of the back of card 3

Card 4

Front

When total income or revenue for a firm is greater than the total costs.

Back

Preview of the back of card 4

Card 5

Front

An intervention system aiming to limit the fluctuations of the price of a commodity.

Back

Preview of the back of card 5
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