Economics 0.0 / 5 ? EconomicsASOCR Created by: Ejone ZekaCreated on: 05-01-13 20:25 resources are scarce but our wants are infinite Basic Economic Problem 1 of 39 The next best alternative forgone Opportunity Cost 2 of 39 Goods that are used to produce other goods and services Capital 3 of 39 Having an idea and taking risks in setting up or running a business Enterprise 4 of 39 Government owns and allocates some resources, and the free market own and allocate others Mixed Economy 5 of 39 includes organizations owned and run by the government, not there to make a profit. Public Sector 6 of 39 Organizations owned and run by individuals or groups. Main aim to get as bigger profit as possible Private Sector 7 of 39 All other factors remain constant Ceteris Paribus 8 of 39 being good at a particular skill/job Specialization 9 of 39 A situation where there is only one firm selling in a market Monopoly 10 of 39 When a firm has more than a 25% of the market share Monopoly Power 11 of 39 The quantity buyers are willing to pay at a given price per period of time Demand 12 of 39 The fall in QD due to a rise in price Contraction of Demand 13 of 39 The increase of QD due to a fall in price Extension of Demand 14 of 39 Goods for which the demand falls for which the demand falls when income rises Inferior Goods 15 of 39 (PASIFIC) Factors Which Shift Demand 16 of 39 Measures the responsiveness of the quantity demanded to a cange in the price of a good. Price Elasticity of Demand 17 of 39 The amount of money a firm recieves when selling its products Total Revenue 18 of 39 The quantity a producer is willing and able to produce at a given period Supply 19 of 39 (PINTSWC) Factors Which Shift Supply 20 of 39 The responsiveness of quantity supplied to a change in price Price Elasticity of Supply 21 of 39 A payment given to a firm, usually by the government Subsidies 22 of 39 Price set below the equilibrium Maximum Price 23 of 39 Price set above the equilibrium - price not allowed to go below it Minimum Price 24 of 39 Taxes on spending Indirect Taxes 25 of 39 When a firm produces good/services, they use resources (CELL). Firms must buy these resources Costs 26 of 39 The amount of goods or services produced by a firm Output 27 of 39 The process of combining scarce resources to make an output Production 28 of 39 Output per worker per period of time Productivity 29 of 39 the amount a person recieves before all deductions are taken into account Gross Income 30 of 39 a persons take home pay Net income 31 of 39 Where free market outcomes lead to major problems for society, usually inefficiency Market Failure 32 of 39 Where resources are used to produce what consumers actually want to buy Allocative Efficiency 33 of 39 A place where buyers and sellers get together and arrange a sale Market 34 of 39 Measure of consumer welfare: The maximum price a consumer is willing to pay for a good minus the market price Consumer Surplus 35 of 39 Measure of producer welfare: the surplus of market price received over the minimum price the producer would be prepared to accept Producer Surplus 36 of 39 A side effect to market activity which benefits third parties without them having to pay Positive Externality 37 of 39 A side effect to market activity which harms third parties without compensation Negative Externality 38 of 39 Where government intervention causes inefficiency in resource allocation Government Failure 39 of 39
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