Good to know
The satisfaction receive from consumption
What is 'Utility'?
The sum of all individual demands
What is market demand?
Following a price decrease of an inferior good, less of the product is consumed
what is True
this is also known as the "income effect"?
This law states that "as consumption increases, the satisfaction from consumption decreases".
What is the law of diminishing marginal utility?
According to consumer behavior theory, these are 2 assumptions made about rational consumers
What are the desire to maximise utility, transitive preferences, perfect knowledge, and the have highly developed analytical skills
The rewards for the factors of production listed in alphabetical order are _____, _____, ____, and ____.
What are interest, profit, rent, and wages?
A 20% increase in price led to a 16% fall in the quantity demanded. What is the PED of this result?
What is PED = 0.8?
An extension in demand will lead to a more elastic position on the demand curve
What is "False"?
A criticism of price controls is that they may lead to ____________
What are "Black Markets"?
If text messages mention the direct costs to the National Hospital Service for missing an appointment is (£160) less people might miss appointments
What is Nudge Theory?
Suzie owns a bakery which generates ¥150,000/yr. Her fixed and variable costs are ¥30,000 and ¥110,000.
Is she making a profit?
What is "Maybe"?
Are we talking about accounting profit or economic profit?
Given the functions Qd = 20-2P and Qs = -10+2P
Equilibrium price is ________ and equilibrium quantity is _______
What are 7.5 and 5?
Inferior goods, necessities, and luxuries are relative..meaning they can be different for different people.
What is "True"?
_________, _________, and _________ are the 3 functions of the price mechanism.
What are signaling, rationing, and providing incentives?
Human behavior is said to be "bounded". These are three areas in which it is bounded
What are bounded rationality, bounded self-control, and bounded selfishness
Changes in _________ and __________ are the most likely factors to impact both demand and supply for a good or service.
What are wages and marketing campaigns?
(the change in Total Cost/ the change in Quantity)
What is "marginal cost"?
Complementary goods are defined a goods for which when the demand for one increase, the demand for the other also increases.
What is "False"?
This is not always true
For example, adding an additional chef to the kitchen causes more accidents and lower marginal output of meals.
What is the law of diminishing returns?
These are 4 objectives businesses might have
What are profit maximisation, Revenue (sales) maximisation), growth, profit satisficing, CSR, etc ?
These are the components of "ESEPME", a useful acronym for answering questions related to market equilibrium changes.
Equilibrium, Shift, Excess, Price Pressure, Movement, Equilibrium
This occurs when price is equal to marginal cost
What is allocative efficiency?
(market equilibrium, the point where social surplus is maximised)
Mr. Collins played women's basketball in college
What is "true"?
These are 3 countries that have introduced taxes on junk food or sugary drinks
What are Mexico, Hungary, UK, France, South Africa, India, etc.?
(other accurate responses accepted)
A strategy that people use to make guesses about things they do not know, by thinking about things they do know and then making an adjustment
What is anchoring?
Remember the population of Morroco?
(also consider framing, availability, and rule of thumb biases)