Economic Foundations
What are the four factors of production?
Land, Labour, Capital, Enterprise
Identify 3 different types of market structures.
Perfect competition, Oligopoly, Monopoly.
What is market failure?
Market failure occurs when the free market fails to allocate resources efficiently, leading to a loss of social welfare.
What is total revenue (include formula)?
Total revenue is the total money a business receives from selling its goods or services, calculated as Price × Quantity sold.
What is the best-selling book series of the 21st century?
Harry Potter
What are the three economic grousps?
Producers, consumers, government
What is one advantage of competition for consumers?
Lower prices, better quality, more choice, or improved customer service.
Give one example of a positive externality.
Vaccinations, education, public parks, healthy lifestyle- because they benefit others beyond the person consuming the good or service.
What is the difference between fixed costs and variable costs?
The difference is that fixed costs stay the same regardless of how much a business produces, while variable costs change depending on the level of production.
When was the Mars Bar invented?
1932
Describe the difference between needs and wants.
Needs are limited only to what is needed to survive. Wants are unlimited and include anything a consumer would like, whether or not they have the resources to purhcase it.
Give two characteristics of a highly competitive market.
Two characteristics of a highly competitive market are many firms, low barriers to entry, similar products, and little control over price.
Explain one negative externality and how it affects third parties.
Pollution from a factory is a negative externality because it harms people who are not involved in producing or buying the product, such as nearby residents suffering health problems.
What is the difference between total revenue and turnover?
Nothing- they are the same!
How many hears does an octopus have?
3 hearts!
What is the economic problem?
Name three barriers to entry for markets.
Brand loyalty, EoS, Patent, Vertical Integration, Being the first mover, Geographical Barriers, High start up costs.
Name 4 types of market failure.
Merit goods, demerit goods, public goods, market power, information failure, inequality, positive externalities, negative externalities.
A business sells 100 units at £5 each. Fixed costs are £200 and variable costs are £2 per unit. Calculate the profit.
Total revenue = 100 × £5 = £500
Total variable cost = 100 × £2 = £200
Total cost = Fixed £200 + Variable £200 = £400
Profit = Revenue − Total Cost = £500 − £400 = £100
What year was the first iPhone released?
2007
Describe the concept of opportunity cost AND use an example.
Something that is given up when making a decision on the use of scarce resources.
Examples:
- 50p to spend on either a chocolate bar or crisps. If you choose the chocolate bar, the OC is the crisps.
- Choosing between buying a new car or new bathroom.
- A firm choosing to either produce more motorbikes or cars.
Income (£) Tax Rate
0 – 12,570 0%
12,571 – 50,270 20%
50,271 – 150,000 40%
Over 150,000 45%
Sarah earns £62,000 a year. Calculate:
a) Her total income tax
b) Her income after tax
a) Total tax= £12, 232
b) Income after tax: £49, 768
Explain how the government could correct a market failure caused by pollution.
The government could impose a tax on the polluting activity, introduce regulations or limits on emissions, subsidise cleaner technology, or provide public awareness campaigns. These measures reduce the negative externality.
Evaluate how a business could increase profit without raising prices.
A business could increase profit by reducing costs (e.g., using cheaper materials, improving efficiency) or increasing output if marginal revenue exceeds marginal cost. However, cutting costs may reduce quality, and increasing output may require more labour or capital, which could raise costs. So, the effect on profit depends on how the changes are managed.
How many songs does Miss Ferguson have on her 'liked songs' spotify playlist?
537 songs.