44521
macro
economics
- general
- as resources
are finite there
is always an
opportunity cost
- PPF
- shift = growth
Annotations:
- more educated/skilled workers new technology more resources
- movement along = opportunity cost
Annotations:
- (different allocation of resources) below curve=unemployment
- shift = growth
- division of labour
Annotations:
- quicker training, more skilled, quicker production boredom=recruitment costs
- types of economy
- free-market
Annotations:
- no government intervention all price mechanism
- mixed
Annotations:
- most countries like england
- centrally planned
Annotations:
- 100% government internention
- free-market
- economic statements
- positive = fact
- normative -value-judgement
- positive = fact
- as resources
are finite there
is always an
opportunity cost
- demand
- movement along curve = price change
- shift = non price
Annotations:
- income tastes substitute goods complimentary goods
- price elasticity of demand
Annotations:
- responsiveness of demand to a change in price % change in QD / % change in P
- income elasticity of demand
Annotations:
- responsiveness of demand to a change in income % change in QD / % change in Y
- cross elasticity of demand
Annotations:
- responsiveness of demand to a change in price of another good % change QD (A) / % change in P (B)
- goods
- normal
Annotations:
- positive income elasticity income increases, demand increases
- inferior
Annotations:
- negative income elasticity income increases, demand decreases
- substitute
Annotations:
- positive elasticity good A increases in price, good B increases in demand
- complimentary
Annotations:
- negative cross elasticity good A increases in price, good B decreases in demand
- normal
- movement along curve = price change
- supply
- movement along curve = price change
- shift = non price
Annotations:
- changes in production cost technology changes ability to enter/exit industry government subsidies
- elasticity
Annotations:
- determined by spare capacity level of stocks perishability ease of entry/exit to industry
- vertical - perfectly inelastic
Annotations:
- webley staduium
- movement along curve = price change
- equilibrium prices/wages
- price/wage rate is
determined by
the interaction
of demand
and supply
- excess
- demand = price rise
- supply = price fall
- demand = price rise
- indirect tax = inward shift on supply curve
Annotations:
- causing a fall in output and rise in price
- unit subsidy = outward shift
Annotations:
- rise in output, fall in price
- National Minimum
Wage
Annotations:
- reduces poverty reduces exploitation causes unemployment
- price/wage rate is
determined by
the interaction
of demand
and supply
- market failure
- forms
Annotations:
- externalities public goods imperfect information labour immobility unstable commodity markets
- external costs = third party
Annotations:
- (ignored by price mechanism)
- free-rider problem
Annotations:
- public goods wouldnt be provided in a free market economy because there is no government intervention
- imperfect knowledge
Annotations:
- consumers/producers make descisions that reduce their welfare
- labour immobility
Annotations:
- workers aren't allocated their most efficent use due to geographical or occupational barriers
- unstable commodity markets
Annotations:
- fluctuations make it difficult for consumers to budget their income and for producers to plan investement
- forms
- government intervention
- types
Annotations:
- indirect taxation subsidies property rights tradable pollution permits buffer stock schemes minimum prices
- indirect
taxes/tradable
pollution permits
Annotations:
- these limit production and internalise external costs to the market
- government subsidies
Annotations:
- increase production and internalise external benefits
- buffer stock/minimum price schemes
Annotations:
- stabilise prices, increase producer incomes
- property rights
Annotations:
- help establish the ownership and control of resources in order to manage their use and prevent exploitation
- government failure
Annotations:
- government intervention leads to an increase in inefficiency and a net welfare loss
- types
Annotations:
- high taxes encourage illegal markets and reduce incentive to work subsidies require funding causing borrowing minimum wage/prices lead to excess supply planning laws impede market forces
- types
Want to create your own Mind Maps for free with GoConqr? Learn more.