terminology
examines the behaviour of individual decision making units in a economy
microeconomics
where a manufacturing process is split into a sequence of individual tasks
Division of labour
These are the free forces that coordinates the market without government intervention as mentioned in Adam Smith's invisible hand
demand and supply
Indirect taxes shift the supply curve
True
Fall in price reduces real income
income effect
A statement that is based on facts or actual evidence
Positive statement
An economic system where both market and government are involved
Mixed
The point at which market tends to remain stable .
Equilibrium
Indirect taxes lead to welfare loss
True
Every additional unit gives lesser satisfaction
marginal utility theory
other things remaining unchanged
Ceteris paribus
Where there is a change in ownership from public sector to the private sector
privatisation
The difference between the price the consumer is ready to pay and the price in the market
Consumer surplus
Price floors give rise to shortages
False
loss of social surplu
Deadweight loss
All man made and physical resources of an economy
Capital
A simple representation of the maximum level of output possible using all resources of an economy or firm
PPC
assumption that consumer is able to rank preferences
Consumer rationality
Buying and selling transactions that go unrecorded and are often illegal exist in unorganised economy
False.
The curve that illustrates the YEDs of a product
Engel Curve
The process by which individuals, firms and economies concentrate on producing those goods and services where they have an advantage over others
specialisation
Graphical representation of income elasticity of inferior, normal and superior goods
Engel curve
Cost borne by third parties or society
External cost
A higher tax burden leads to higher percentage of GDP taken away as tax
True
the changes in macroeconmy where recession and peak are the extremes
Business cycle