Economics Unit 1

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  • Created by: naomi
  • Created on: 04-05-13 13:10
Competitive Demand ?
two or more goods are substituted for each other
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dervied demand
demanded for production of another good
2 of 37
composite demand
goods demanded for two or more distinct uses
3 of 37
normative statement
statement that is a value judgement
4 of 37
joint supply - two or more goods supplied for different purposes =
^ D > ^ £ > ^ S the S for other good will ^ > £ decreasing
5 of 37
price elasticity of demand
measures the responsiveness of QD to a change in £ of a good
6 of 37
cross elasticity of demand
measures responsiveness of QD to changes in £ of another good
7 of 37
Demand is price Elastic is the value of elasticity is
>1
8 of 37
Demand is price Inlastic is the value of elasticity is
<1
9 of 37
price elastic =
% change £ leads to larger % change in QD
10 of 37
price inelastic =
% change £ leads to smaller % change in QD
11 of 37
perfectly elastic / inelastic
= 0 change in £ has no effect on demand
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unitary =
1 ... % change = the same and opposite of & change in QD
13 of 37
downwards sloping demand curve is always
negative because increase in one variable leads to decrease in another
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substitutes have
positive cross elasticity
15 of 37
compliments have
negative cross elasticity
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no relation have
zero cross elasticity
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supply is always
positive
18 of 37
total expenditure =
quantity purchased x price
19 of 37
normal good =
income ^ demand ^
20 of 37
inferior good =
income ^ demand decreases
21 of 37
specialisation is
production of limited range of goods by individual firm or country in co-op with others so a complete range of G&S are produced
22 of 37
Division of Labour
is specialisation by individuals it ^ productivity by ^ in labour and capital productuity
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buffer stock is a scheme
organisation buys and sells in the open market so as to maintain a minimum price in the market for a product
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normal good has
positive income e of d
25 of 37
inferior good ha
negative income e of d
26 of 37
diseconomies arise due to
managment and geographical problems
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complete market failure
fail to lead to any production .. missing market exists
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partial market failure
under or over production of a good
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private good - consumption by one leads to
no consumption for another
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public good
non rival, non rejectable, non excludable
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merit good
underprovided by MM
32 of 37
demerit good
over provided by MM
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SC>PC
neg externalities
34 of 37
SB>PB
pos externlalities
35 of 37
monopoly
one firm or supplier in the market
36 of 37
subsidy
grant by government to increase production of particular GS
37 of 37

Other cards in this set

Card 2

Front

dervied demand

Back

demanded for production of another good

Card 3

Front

composite demand

Back

Preview of the front of card 3

Card 4

Front

normative statement

Back

Preview of the front of card 4

Card 5

Front

joint supply - two or more goods supplied for different purposes =

Back

Preview of the front of card 5
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