Unit 1 Keywords

sarahsing
Flashcards by sarahsing, updated more than 1 year ago
sarahsing
Created by sarahsing over 7 years ago
93
8

Description

Flashcards on Unit 1 Keywords, created by sarahsing on 04/26/2014.

Resource summary

Question Answer
Scarcity Situation in which people have unlimited wants with limited resources
Opportunity Cost The cost of the next best alternative forgone
Market equilibrium when the price is such that the quantity that consumers wish to buy is balanced by the quantity that firms wish to supply
elasticity a measure of the sensitivity of one variable to changes in another
Price elasticity of demand a measure of the sensitivity of QD to a change in the price of a good
income elasticity of demand a measure of the sensitivity of quantity demanded to a change in consumer incomes
cross price elasticity of demand the sensitivity of quantity demanded of a good to a change in the price of another good
price elasticity of supply the sensitivity of the quantity supplied to a change in price
consumer surplus value that consumers gain from consuming a good or service over the price paid
producer surplus the difference between the price and received by a firm for a good and the price that they would have been prepared to supply the good at
marginal cost the cost of producing an additional unit of output
productive efficiency when a firm operates at minimum cost and maximum product output
allocative efficiency when society produces an appropriate bundle of goods relative to consumer preferences
technical efficiency gaining maximum possible output from a given set of inputs
cost efficiency the best combination of inputs of factors of production given the relative prices of those factors
Market failure when there is not an optimal allocation of resources
externality a cost or benefit that is not reflected in the market price of a good
private cost incurred by an individual as part of its economic activity
external cost borne by a third party
private good consumed by one person only
public good non-exclusive and non-rivalrous
free rider when an individual cannot be excluded from consuming a good and therefore doesn't pay for its provision
Merit good brings unanticipated benefits to consumers
demerit good has more negatives than realised
asymmetric information when some people in the market have better information about market conditions than others
government failure misallocation of resources from government intervention
indirect tax tax levied on goods. VAT
Incidence of tax the tax is split between the buyer and the seller
subsidy a government grant given to producers to encourage supply
Show full summary Hide full summary

Similar

AS Biology Unit 1
lilli.atkin
Unit 1 flashcards
C R
Cell Structure
megan.radcliffe16
AS Chemistry - Enthalpy Changes
Sarah H-V
Exchange surfaces and breathing
megan.radcliffe16
Cell Transport
Elena Cade
OCR Chemistry - Atoms, Bonds and Groups (Definitions)
GwynsM
OCR AS Biology
joshbrown3397
Using GoConqr to study Economics
Sarah Egan
F211: Transport in animals keywords and info
Gurdev Manchanda
Economics
Emily Fenton